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

To: Apache Indian who wrote (3172)	5/13/1999 9:32:00 PM
From: ShortyBear	Read Replies (1) \| Respond to of 7772

RE: $300/sh in his dreams. $300/sh may be possible if Ebay's performance convinces us that it will grow more than 40% per quarter for the next twelve quarters in a row. That's because the 991Q earnings of .05/sh would give the company a value of $6/sh if modest growth (P.E. 30) were expected. Phenomenal growth of 50%/quarter a/k/a 400%/year would lead to a 3 year projection of $6/sh x 5 x 5 x 5 = $750/sh. It's possible, however, that many people (e.g. the ones who own a calculator and know how to use it) have realized by now that this quarter's growth appears to be running a relatively anemic 25% (at least so far), and if that if this lower growth level continues then the corresponding 3 year projection would be about $100/sh. Of course, some pessimists (realists?) might even conclude that the current auction market, although growing, is close to saturated by Ebay's existing capacity -- and that growth will continue to decline over time until it becomes as little as 70%/year (a healthy growth for many stocks, but a Ebay would probably need a lot more lift than this to stay airborne). I don't want to tell you the bad news of where 70%/year growth puts the corresponding projected stock price, but it would not be a pretty site for long's. (Hint: think about the original IPO price. As for now, today's drip could indicate that the excitement of the Barron's article and the 2.1M A/C crossing have passed -- and no news may not be good news for longs. Perhaps that's why some long's on this thread appear to be trying to imply that another split is in the works, only 2 months after the last one. Finally, I wonder if there will be any special dangers to this stock come October, when Y2K and triple witching superstitions may cause the (usual?) post summer dip. Those have been bad times for many stocks' valuations -- it will be interesting to see how those stocks with the most air underneath fare. Well, no matter what happens, it's bound to be interesting. PS - I find the conspiracy theory (raised earlier in this thread) about the $170/sh support (related to secondary IPO) intriguing. If the stock continues southbound, let's see if it stops there or not. If it does not, so much for the conspiracy theory.