Internet Market Close Report for 1998.09.24

By webmaster on November 20th, 2008
Posted in virtualants.com | edit

  24-Sep-98 point change % change
ISDEX 109.98 -1.12 -1.01%
DJIA 8,001.99 -152.42 -1.87%

At that rate EBAY trades at 50x our 1998 sales estimate. Fully-diluted EBAY shares outstanding value the firm at $2.46 billion or 70x 1998 revenue estimates.

We think EBAY could post $85 million revenue in 1999 if it spends the IPO proceeds smartly to grow its user base and develop key alliances to fuel more sales. If so that implies a 22x revenue multiple on primary shares market cap or 30x fully-diluted.

Helping fuel the EBAY rocketship is a report by Morgan Stanley which rated EBAY as "outperform" before the stock even began trading. We thought EBAY could see the $40ish range with the strong book on it and the hyper-revenue growth the personal auction service may experience.

On the downside we expect margins to suffer as marketing costs and growth take place. Example, ONSALE (NASDAQ:ONSL), a different flavor of auction service, had positive earnings before committing to investing in itself for growth.

In the past 52-weeks ONSL has traded at double its close today, $18.50. ONSL market cap sits at $350 million, a meager 19% of EBAY. In other words, we don't expect EBAY to sustain its first-day valuation, built more on euphoria than fundamentals. More in tomorrow's Internet Stock Report analysis on Internet.com's IPO Index.

Meanwhile, profit taking gives the Dow and NASDAQ, a haircut as both end lower today. ISDEX also loses ground on profit takers, as perhaps a rush to get into EBAY.

Moves and news:

  • Mecklermedia launches its InternetNews Radio, a daily audio news briefing about the Internet industry. Uses RealNetworks (NASDAQ:RNWK) RealAudio technology to deliver the Webcast available at InternetNews.com. Related news, more than 200 companies exhibit and 190 conference sessions take place at Mecklermedia's ISPCON, September 28 - October 1 at San Jose.

  • CMG Info (NASDAQ:CMGI) net revenues increase 38% vs. third quarter to $28.1 million for its fourth quarter ended July 31, 1998. Net income reaches $31.4 million, or $1.38 per share vs. a net loss of $11.7 million, or ($0.55) loss per share 3Q98. As noted in this report CMGI is in a unique position to increase earnings anytime as long as the market is strong.

    For 4Q it realizes a $54 million pre-tax gain on the sale of 950,000 shares its position in Lycos (NASDAQ:LCOS), as well as a $24.3 million gain on stock issued by Lycos. CMG also owns about a third of GeoCities (NASDAQ:GCTY) and numerous private Internet outfits.

  • SNAP, the jointly owned CNET-NBC directory effort, plans to distribute a customized version of Netscape's browser to its users and marketing base. One of the best moves Netscape ever made was to make the browser free and customizable. We think more of these sorts of deals could get done.
    Inside scoops! Internet Investment Symposium '98 @ Fall Internet World!

    New York City, Oct. 8-9 as Steve Harmon, Upside, CNNfn, PriceWaterhouseCoopers, and more talk investments with some of the top names in the industry...top execs of GeoCities, CMG Info, DoubleClick, venture capitalists doing the $ billion deals, debuts hot startups at Startup Live! Sign up now

    LaunchPad Pavilion, part of Fall Internet World '98, the world's largest Internet industry trade show held Oct 5 - 9, offers exhibit space for startups ONLY at a reduced price in order to meet their often limited capital available at the startup stage. It is Mecklermedia's way of letting the newbies get their voice heard. If you or a friend is at a Internet startup and want to exhibit at Fall Internet World (expected attendance is more than 50,000) in New York City's Javits Center then contact Reed Bocchino 203-341-2826 or email: mailto:rbocchino@mecklermedia.com