Valuing Internet Business
| Autor: | Chris Higson, John Briginshaw |
|---|---|
| Rok vydání: | 2000 |
| Předmět: |
Finance
business.industry Financial economics media_common.quotation_subject Economics Econometrics and Finance (miscellaneous) Cash Stock valuation Economics Business Management and Accounting (miscellaneous) The Internet Profitability index New economy business Internet business Stock (geology) media_common |
| Zdroj: | Business Strategy Review. 11:10-20 |
| ISSN: | 1467-8616 0955-6419 |
| DOI: | 10.1111/1467-8616.00125 |
| Popis: | Is there a bubble in internet stock prices, has the new economy changed the rules of stock valuation? In this article, the authors argue that the old rules still apply. The only way to test the reasonableness of new economy stock prices is to model the company's ability to generate cash in the future. This analysis also allows the development of a view about the performance that would be needed to justify current valuations. The analysis suggests that many internet valuations are stretched. Investors are focused on growth prospects for the firms, but realistic analysis about future profitability has been neglected in what will be an increasingly competitive world. Further, investors' assumptions that the new economy businesses will not require assets are unrealistic in many cases. Finally, because some new economy stocks are overvalued, there is a risk of misdirection of productive resources. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
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