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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Peter Goss who wrote (57195)	4/24/1999 8:19:00 AM
From: gnuman	Respond to of 132070

CyberBanks, the power and craziness of ".com" washingtonpost.com By Kathleen Day Washington Post Staff Writer Friday, April 23, 1999 Consider two banks of roughly the same asset size. Equitable Federal Savings Bank, a profitable traditional bank in Wheaton, has assets of about $384 million. Its market capitalization – the value of all of its shares – is $22 million. Net.Bank Inc. has the cachet of the World Wide Web in its name. It has assets of $388 million, but its market capitalization is a mind-boggling $1.49 billion. .................. "These companies have been caught up in all this Internet frenzy," said Christopher Kelley, bank analyst for Morgan Keegan Inc., a Memphis-based investment bank that took Net.Bank public in 1997. "At the end of the day, these are banks. They may be doing great, but they are still banks." .................... Sean Ryan, bank analyst at Bear, Stearns & Co., says investors need to understand the dynamics of electronic commerce as well as traditional banking to understand these companies. Unfortunately, he says, the stock prices of Telebanc and Net.Bank are being pushed to unrealistic heights by a large number of small investors who don't pay attention to a company's financial fundamentals. "You have a cabal of people who are looking in the mirror and seeing George Soros," he said. "It's not sustainable. At some point when you're sitting at the roulette table, it's prudent to declare victory and go home."