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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

Internet Stocks

Jugroop Kullar

Nicole Taylor

presentation outline
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
What are General Examples of Internet Stocks?
  • AMZN
  • EBAY
  • AOL
  • YHOO
  • JNPR
  • CSCO
  • ORCL
types of internet stocks
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>

types of internet stocks1
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>

types of internet stocks2
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>

types of internet stocks3
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>

types of internet stocks4
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>

types of internet stocks5
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>

types of internet stocks6
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>

how are stocks evaluated
How are Stocks Evaluated?
  • By Research
  • By Stock Market Indices
stock market
Stock Market

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

how are stocks evaluated1
How are Stocks Evaluated?
  • Company’s Financial Standings/Performance
  • P/E Ratio
p e ratio
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.

what does it mean
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”.

the risk factor and p e
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.

tech wreck
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.
how did it happen
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.

what is an ipo
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

ipos over time
IPOs Over Time

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

ipos over time1
IPOs Over Time

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

dot com graveyard
Dot Com Graveyard

Source: Battery, Jim. “Dot-Com Details: The Numbers Behind the Year’s E-Commerce Shake-out.”

InfoWorld. 26 March 2001.

case studies
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.

juniper networks
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.

juniper networks1
Juniper Networks

Name

Title

Age

Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.

Lexis-Nexis Academic. 8 November 2001.

juniper networks2
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.

juniper s finances in thousands
Juniper’s Finances(in thousands)

Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.

Lexis-Nexis Academic. 8 November 2001.

juniper s performance
Juniper’s Performance

Source: www.quicken.com

case studies1
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.

amazon com
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.

amazon com1
Amazon.com

Name

Title

Age

Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.

Lexis-Nexis Academic. 8 November 2001.

amazon com2
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.

amazon s finances in thousands
Amazon’s Finances(in thousands)

Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.

Lexis-Nexis Academic. 8 November 2001.

amazon s performance
Amazon’s Performance

Source: www.quicken.com

case studies2
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.

yahoo
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.

yahoo1
Yahoo!

Name

Title

Age

Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.

Lexis-Nexis Academic. 8 November 2001.

yahoo2
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.

yahoo finances in thousands
Yahoo! Finances(in thousands)

Source: “Standard & Poor’s Corporate Descriptions plus News.” The McGraw-Hill Companies.

Lexis-Nexis Academic. 8 November 2001.

yahoo s performance
Yahoo’s Performance

Source: www.quicken.com.

case studies3
Case Studies
  • Pfizer Inc
  • Anheuser Busch Companies Inc
  • Wal Mart Stores Inc
  • Citigroup Inc
performance
Performance

Pfizer

Anheuser Busch

Wal Mart

Citigroup

Source: www.quicken.com

lessons learned
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!
the 5 pack
The 5 Pack

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

the end

The End!

Thank You