On shorting eBay

Dan Kohn (dan@teledesic.com)
Wed, 27 Jan 1999 08:48:57 -0800

I shorted eBay two weeks ago at 297. It fell to 182 a couple of days

Then came the news this morning:

Shares rocketed $73.12 to $294 a share after it said earnings hit 7
cents a share and revenues rose more than six-fold to $19.5 million.

Just to be clear, that's $47.4 M in annual revenues, providing a market
capitalization of $11.8 B. (A price to revenue ratio of 249.) And, eBay
(unlike most Internet stocks) actually has earnings, $2.4 M for the
year, which is $0.06 a share. So, eBay has a P/E ratio of 4900. I'm
sure they'll surge again now that they've announced a 3 for 1 split
(since they'll be such a better value).

We'll see how much longer I can hold out before I suffer a short squeeze
like the rest of the fools who bet against Internet stocks.

- dan