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

To: JF2155 who wrote (3165)	5/8/1999 10:17:00 AM
From: Jenne	Read Replies (1) \| Respond to of 7772

The wacky world of Web stocks Who cares if this doesn't make sense? By Zapman, CBS MarketWatch Last Update: 2:31 PM ET May 1, 1999 Letters to the editor (A.k.a. the whine rack.) SAN FRANCISCO (CBS.MW) -- Zapman never tires of listening to money manager Roger McNamee, whose growing frustration with Net stock valuations (who's NOT frustrated?!) hasn't dulled his wit a nit. Is this what Alan Greenspan is talking about when he speaks of an efficient market? Let's hope the heck not. Speaking on a "View from the Buyside" panel at the Hambrecht & Quist technology conference the other day, the oft-quoted bard of Integral Capital offered this simple view of Internet stock prices: "Fifty dollars a share is cheap, $150 a share is fairly expensive, but $200 is cheap again, because that means you're about to have a 4-for-1 split." Then there's the long-term fundamental school of Internet investing, which was presented by Colin McNay of Essex Investments. That involved searching the Internet bulletin boards for the latest company to register a domain name, buying the stock and selling it by the end of the day. McNay also offered a simplified technical trading approach: If it's rising, buy it. If it's falling, sell it. Today on CBS MarketWatch Dow plows to a new record Economy gains 234,000 jobs Gold shares plunge on U.K. sale Wave of CEO purges as earnings season fades Small banks may mean big bargains More top stories... CBS MarketWatch Columns Updated: 5/7/99 5:49:40 PM ET Happily confused Is this what Alan Greenspan is talking about when he speaks of an efficient market? Let's hope the heck not. Zapman's confused and elated and worried and happy just like the rest of you. How come we all loved Amazon (AMZN: news, msgs) a few months ago when it was losing lots of money? How come it sank this week after saying its sales tripled in the past year? How come AOL shares (AOL: news, msgs) sank after the Web wonder (with 16 million paying members, mind you) beat Wall Street analysts' earnings expectations? Suddenly better-than-expected isn't nearly good enough. There wasn't a fund manager sitting next to Roger on that panel who hadn't made a bundle on Web stocks over the past year. And -- astonishment notwithstanding -- most of 'em enthusiastically recommended stocks like Exodus (EXDS: news, msgs), Inktomi (INKT: news, msgs), EBay (EBAY: news, msgs), Yahoo (YHOO: news, msgs) ... oh, you know, the usual suspects. "You'd be ill-advised not to be overweight in some of these big brand names on the Internet," said McNay. Steve Demirjian of Westfield Capital summed up the importance of the Internet at the H&Q conference this way: "This year, it's a word that every single company is talking about at every single presentation ... If you're not looking at changing your business to an Internet model, you're in trouble." Everybody wins! Picking the winners, at least for now, seems to be sort of irrelevant according to these wise souls. "There's going to be hundreds of winners," predicted McNay. The fourth panelist, Duncan Byatt of Eagle & Dominion Asset Management, brought a European perspective to the importance of the Web, saying: "Any business model you can think of has to be re-engineered." Oh, there are moments of anxiety, like Monday, April 19, when the Goldman Sachs Internet Index lost 19.4 percent of its value. But it made it back with interest by the end of the week. "One question is when is the party going to end," admitted Demirjian. "We don't know when the party's going to end. Last week, it was like the police showing up at the door and telling us to keep it down. But we closed the door, kept drinking and kept on partying." And what a party! Zapman just hasn't seen this kind of enthusiasm since the market boom of the late '20s! The good ship Internet, by all accounts, is as unsinkable as the Titanic was on the day she launched! Folks, the Internet is real and people are making real money by investing in it. And there's gotta be a lot more money coming down the line. But sooner or later, there's gonna be a shakeout. So go to the banquet and gorge. I'll be there. If you're looking for me there, you'll find me sitting near the exit.