Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : USWeb (USWB) -- Ignore unavailable to you. Want to Upgrade?

To: SMALL FRY who wrote (805)	4/29/1999 9:29:00 AM
From: RealMuLan	Read Replies (2) \| Respond to of 1188

<<I calculated US Webs value per employee at around $1,200,000 >> Who calculated this? Rick? Apparently it is way off. This para. is from that Street.com article. It said revenue per employee is $148,000 in 1st Q, 1999. <<In the meantime, analysts will be gauging progress on the company's makeover, tracking revenue growth and average revenue per worker. Between the third quarter in 1998 and the first quarter in 1999, for example, revenue per employee increased from $139,000 to $148,000. "I think June is an inflection point," says Danny Rimer, an analyst with Hambrecht & Quist, which has done underwriting for USWeb/CKS. "If they come out with good numbers, investors will be significantly rewarded." >> Message 9195686

To: SMALL FRY who wrote (805)	4/29/1999 10:24:00 AM
From: Rick	Read Replies (1) \| Respond to of 1188

Small Fry - I covered my short when USWB hired an adult to run it's business. You will also recall that I indicated that the replacement of Firmage gave USWB a higher likelihood of success. Nonetheless, I view it merely as a trading stock, and have held positions long and short over the past year or so. You've stated that my argument is full of holes yet fail to show me the light. The point on a per employee valuation should be rather obvious - employee hours are the inventory, it is what you sell to customers.....so, if I have a stable of employees today that can generate around $158,000 each year, and the market is paying over $1,200,000 based on todays employee base, the math is quite simple that in order to get a decent return on investment the company will have to grow very rapidly to make the numbers work. Let's say each employee clears you $50,000 - Would you invest $1,200,000 today for an employee that can generate $50,000 per year in profits ? NO. So, clearly investors (or fools depending on your perspective) are paying for the future growth. My perspective is that they are overpaying. I will be happy to come back in June/July. To be specific, my proposed trade is CATP long and USWB short. This trade takes advantage of the valuation disparity between the two, and is a lower risk way to play the services industry. USWB has always been a service stock masquerading as an internet stock. rick.