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Technology Stocks : eBay - Superb Internet Business Model -- Ignore unavailable to you. Want to Upgrade?

To: M31 who wrote (2062)	3/8/1999 10:28:00 PM
From: Buster O. Hype	Respond to of 7772

TIME TO DEFLATE THIS EBAY BUBBLE ... 1. Market cap is now 20B 2. Of course gamblers posing as investors get suckered in because of the 'high' gross margin model, no inventory. But fact is, EBAY is nothing more than a royalty business, a commission business. 3. Let's give an estimate. Let's say in the next 5 years, online person-to-person auction become a 10-billion dollar business. Let's say because of competition, 3% commission become the norm, so this would translate to a revenue of 300 million. Let's say EBAY captures 50% of this or 150 million/year. Ooops, but EBAY is already worth 20 billion. 4. Let's say, EBAY captures 300 million. But EBAY is already worth 20 billion. 5. We just have to increase the estimate from $10 billion to $100 billion in person-to-person auctions, 5% commission, translating to a $5 billion business. Ebay captures 80% of the market or $4 billion annual sales. Now it's cheap at 5 times 2004 sales.