RUMOR MILL
Monday, May 1, 2000
DESPITE ROSY PREDICTIONS, INTERNET FIRMS FALTER
63 "Buys," 9 "Holds" And 1 "Sell" Don't Add Up To Much For Amazon, eBay and Priceline
Amazon.com Inc., eBay Inc. and Priceline.com Inc. this week said their quarterly sales surpassed the rosiest forecasts.
The companies' shares, however, barely budged.
"These stocks have been overvalued," said Geoffrey Hirt, a finance professor at DePaul University in Chicago. "A lot of portfolio managers decided the game is over."
Somebody tell Wall Street. The three companies' shares combined have 63 "buy" ratings, nine "holds" and one "sell." Which any fool knows means…er…something either positive or very ironic, in stock market terms.
Some analysts this week became even more bullish. Amazon.com, which has lost $1.2 billion in six years, has a business model that "is working," Donaldson Lufkin & Jenrette analyst Jamie Kiggen wrote in a report. Priceline.com, which has lost the same amount of money in less than half the time, had a "blow-out" first quarter, wrote Mary Meeker of Morgan Stanley Dean Witter. Auctioneer eBay, which trades at 418 times estimated per-share earnings, had "impressive user growth" wrote analyst Lauren Cooks Levitan of Robertson Stephens & Co.
Many investors continued to sell. Shares of the three companies have fallen at least a third from the past year's highs, wiping out a combined $50 billion in market value. And these are the three companies investors generally consider the best Internet retailing has to offer.
The companies' shares, however, barely budged.
"These stocks have been overvalued," said Geoffrey Hirt, a finance professor at DePaul University in Chicago. "A lot of portfolio managers decided the game is over."
Somebody tell Wall Street. The three companies' shares combined have 63 "buy" ratings, nine "holds" and one "sell." Which any fool knows means…er…something either positive or very ironic, in stock market terms.
Some analysts this week became even more bullish. Amazon.com, which has lost $1.2 billion in six years, has a business model that "is working," Donaldson Lufkin & Jenrette analyst Jamie Kiggen wrote in a report. Priceline.com, which has lost the same amount of money in less than half the time, had a "blow-out" first quarter, wrote Mary Meeker of Morgan Stanley Dean Witter. Auctioneer eBay, which trades at 418 times estimated per-share earnings, had "impressive user growth" wrote analyst Lauren Cooks Levitan of Robertson Stephens & Co.
Many investors continued to sell. Shares of the three companies have fallen at least a third from the past year's highs, wiping out a combined $50 billion in market value. And these are the three companies investors generally consider the best Internet retailing has to offer.
In related news, Hitsdailydouble.com will debut for the public on May 8. If portfolio managers didn't believe "the game was over" already, that should put the final nail in the coffin.
