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Internet Stocks

Internet Stocks. Jugroop Kullar Nicole Taylor. Presentation Outline. Examples of Internet Stocks Types of Internet Stocks How Stocks are Evaluated P/E Ratio Tech Wreck IPOs Examples Juniper Networks, Amazon.com, Yahoo! Lessons Learned. What are General Examples of Internet Stocks?.

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Internet Stocks

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  1. Internet Stocks Jugroop Kullar Nicole Taylor

  2. Presentation Outline • Examples of Internet Stocks • Types of Internet Stocks • How Stocks are Evaluated • P/E Ratio • Tech Wreck • IPOs • Examples • Juniper Networks, Amazon.com, Yahoo! • Lessons Learned

  3. What are General Examples of Internet Stocks? • AMZN • EBAY • AOL • YHOO • JNPR • CSCO • ORCL

  4. Types of Internet Stocks • E-commerce – consumer • E-commerce – business • Content • Connectivity • Software • Services Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>

  5. Types of Internet Stocks • E-commerce – consumer • Companies that sell goods/services to consumers over the Internet • Examples: • Amazon.com • Ebay.com • Autobytel.com • E-trade.com Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>

  6. Types of Internet Stocks • E-commerce – business • Companies that sell goods/services to businesses over the Internet • Examples: • Stamps.com • Hotjobs.com • Allscripts Inc. • Claimsnet.com Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>

  7. Types of Internet Stocks • Content • Companies that provide information or community services via the Internet to consumers and/or businesses • Examples: • Yahoo! • Lycos • Homestore.com • Ask Jeeves Inc. Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>

  8. Types of Internet Stocks • Connectivity • Internet service providers (ISPs), Application service providers (ASPs), hosting/co-location, backbone providers • Examples: • AOL • Juno Online • Digex Inc. • Earthlink Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>

  9. Types of Internet Stocks • Software • Companies that design and sell software for use on the Internet, Intranets, or Extranets • Examples: • Ariba • Verisign • Macromedia Inc • Broadvision Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>

  10. Types of Internet Stocks • Services • Companies that provide services to businesses operating on the Internet, including consulting, advertising, and marketing • Examples: • Network Solutions • Modem Media • Cobalt Group • Doubleclick Source: “212 and Counting.” 18 August 1999. 11 November 2001 <http://fundpilot.net/stockbrief.htm>

  11. How are Stocks Evaluated? • By Research • By Stock Market Indices

  12. Stock Market Sources: www.biz.yahoo.com and Group 5 presentation on Internet Stocks from Winter 2001 Semester

  13. How are Stocks Evaluated? • Company’s Financial Standings/Performance • P/E Ratio

  14. P/E Ratio P/E = price of stock  stock earnings (how much you’re willing to pay for a company’s earnings) Source: Interview with Ben Worley, Investment Rep. From Edward Jones, Sept. 7, 2001.

  15. What does it mean? “The Idea behind P/E Ratio is that it is a prediction or more likely an expectation of the company’s performance in the future. A company with a P/E higher than the market or industry average means the market is expecting big things over the next few months or years. A company with a high P/E ratio will eventually have to live up to this high rating by either substantially increasing its earnings, or the stock price will need to drop.” Source: www.investopedia.com “ Understanding the P/E Ratio”.

  16. The Risk Factor and P/E • Beware! Even in stocks, there are speed limits. Pfizer drives at 30 – 40 MPH Juniper Networks was speeding at 400 MPH at the highest peak Source: Interview with Ben Worley, Investment Rep. From Edward Jones, Sept. 7, 2001.

  17. Tech Wreck • “When Good Stocks Go Bad” • These companies did not live up to the high expectations, so inevitably, the stock price had to fall…crash.

  18. How Did it Happen? • “Sticker Shock” • People overpaid for these stocks and couldn’t get rid of them once they started losing value Source: Interview with Ben Worley, Investment Rep. From Edward Jones, Sept. 7, 2001.

  19. What is an IPO? • Initial public offering (IPO) — The first time a company sells stock to the public. An IPO is a type of a primary offering, which occurs whenever a company sells new stock, and differs from a secondary offering, which is the public sale of previously issued securities, usually held by insiders. Some people say IPO stands for "Immediate Profit Opportunities." More cynical observers say it stands for "It's Probably Overpriced." http://moneycentral.hoovers.com/msn/basics/0,2980,6,00.html

  20. IPOs Over Time Source: http:.//moneycentral.hoovers.com/msn/ipo_performance/recent_ipos/0,2980,3_101,00.html

  21. IPOs Over Time Source: http:.//moneycentral.hoovers.com/msn/ipo_performance/recent_ipos/0,2980,3_101,00.html

  22. Dot Com Graveyard Source: Battery, Jim. “Dot-Com Details: The Numbers Behind the Year’s E-Commerce Shake-out.” InfoWorld. 26 March 2001.

  23. Case Studies • Juniper Networks Inc • A provider on Internet infrastructure solutions that enable Internet service providers and other telecommunications service providers to meet the demands resulting from the rapid growth of the Internet Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexus-Nexis Academic. 8 November 2001.

  24. Juniper Networks • Incorporated in 1996 in CA • IPO of common stock in June 1999 • $34/share of 4.8 million shares • Net proceeds = $163 million • Has 927 Employees • Operates out of Sunnyville, CA • Offices in 30 countries around the world Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  25. Juniper Networks Name Title Age Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  26. Juniper Networks • Main Product is: • M Series Internet backbone routers • Customers include: • Cable & Wireless • Qwest Communications • Verio • MCI WorldCom • Top Competitors are: • Nortell Networks • Cisco Systems • Avici Systems Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  27. Juniper’s Finances(in thousands) Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  28. Juniper’s Performance Source: www.quicken.com

  29. Case Studies • Amazon.com Inc • World’s leading online retailer. Company directly offers for sale millions of distinct items in categories such as books, music, DVDs, videos, toys electronics, software, video games and home improvement products. Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  30. Amazon.com • Launched in 1995 by founder Jeff Bezos • IPO of common stock in May 1997 • $18/share of 3 million shares • Net proceeds = $54 million • Has 9000 Employees • Operates out of Seattle WA Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  31. Amazon.com Name Title Age Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  32. Amazon.com • Products and Services include: • Books, music,DVDs, videos, consumer electronics, toys, camera and photo items, software, computer and video games, tools and hardware, lawn and patio items, kitchen products and wireless products • Customers: 30 million Worldwide • Top Competitors are: • Barnes & Noble • CDnow • eBay Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  33. Amazon’s Finances(in thousands) Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  34. Amazon’s Performance Source: www.quicken.com

  35. Case Studies • Yahoo! Inc • Global internet communications, commerce and media company that offers a comprehensive branded network of services to more than 120 million users each month worldwide. WWW.YAHOO.COM was the first online navigational guide to the World Wide Web (WWW). Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  36. Yahoo! • Incorporated in CA on Mar 5 1995 • Again in Delaware May 18 1999 • IPO of common stock in April 1996 • $13/share of 2.6 million shares • Net proceeds = $33.8 million • Has 3259 Employees • Operates out of Santa Clara CA Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  37. Yahoo! Name Title Age Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  38. Yahoo! • Services include: • Internet portal, search engine, directory for the web, allows registered users personalized web pages, free email and calendars • Customers: 120 million users a month • Top Competitors are: • America Online • Microsoft • Terra Lycos Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  39. Yahoo! Finances(in thousands) Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies. Lexis-Nexis Academic. 8 November 2001.

  40. Yahoo’s Performance Source: www.quicken.com.

  41. Case Studies • Pfizer Inc • Anheuser Busch Companies Inc • Wal Mart Stores Inc • Citigroup Inc

  42. Performance Pfizer Anheuser Busch Wal Mart Citigroup Source: www.quicken.com

  43. Lessons Learned • Good things can come from bad situations – the funding from investors allows us to move forward with technology. • If it looks to good to be true, it probably is! • Don’t put all your eggs in one basket!

  44. The 5 Pack Source: Interview with Ben Worley, Investment Rep. From Edward Jones, Sept. 7, 2001.

  45. The End! Thank You

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