Irrational Internet Exuberance

May 28, 2003 15:21 · 139 words · 1 minute read

Do people not learn? At the very least, they don’t read the Fool. One can expect that a good growth company will have some growth built in to the price. But, with 4 Internet stocks hitting new 52-week highs, you have to wonder if people learned the lessons of the Internet bubble: only so much is justified. Granted, some of the increase in these companies comes from short sellers covering their positions. But, long buyers had to have started the stocks heading in this direction. Check out these market values: eBay: $32.71B, Amazon: $13.65B, Yahoo: $18B, USA Interactive: $19.13B. eBay is a really solid company, with more than $1.2B in sales last year and a fab $250M in profit. But, can you really justify valuing the company at more than $32B? That’s a lot for them to grow into.