Re: [CBS MarketWatch] Analysts mixed on CMGI results

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From: Linda (
Date: Fri Sep 22 2000 - 20:49:25 PDT

Jeff Bone wrote:

<< Weird times. Things are even weirder if you start looking at NPV of
future earnings, etc. assuming growth even at the level the analysts
are predicting for 5yr.>>

Agreed. I think most analysts are still confused about how to value

<<Bottom line: Internet considered uncool, possibly harmful.>>

Definitely not the sector with momentum. B2B infrastructure stocks
still have some life, though.

<<Aside: dunno how to feel vis-a-vis performance vs. ICGE. :-/ >>

Those, and Safeguard Scientific, Winfield capital ... none have had
inspiring stock performances. Internet incubator/VC stocks have
generally suffered the most. This weeks announcement of the
resignation of the president and a senior executive at Divine
interVentures doesn't help. On incubators:

The underlying problem, said Sallie Traxler, director of
development at the National Business Incubation Association, of Athens,
Ohio, is that supply and demand for incubators appear to have peaked at
the wrong times.

For-profit ventures have been launching at a rate of nearly four per
week since the start of the year.

<<Yeah, what a freakin' wacky day, huh?>>

Yup, but this is the kind of day I like!

As you probably know, capitulation helps to create durable Market
bottoms: freak out the weak (=small) investors, allow the
institutional investors to load up at sale prices. The significance
to individual stocks is that it marks a level at which institutional
investors are willing to step in and support the price. It's only
after they've bought all that they want that the stock price can move
up in any substantial way. That is when the sell-side analysts will
begin issuing their "strong buys."

Unfortunately, stocks like CMGI have quite a bit of overhead supply
to work through. While CMGI's price remained relatively stable, there
was still a lot of high volume selling going on today. Usually,
volume has to dry up before we can get a sustainable move upwards.


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