Cramer- "Google IPO Buzz Makes Shorting Dot-Coms Riskie
Enviado: 27/10/2003 19:01"Google IPO Buzz Makes Shorting Dot-Coms Riskier"
By James J. Cramer
10/27/2003 12:51 PM EST
"Can you afford to be short a dot-com with Google lurking?
I thought about this oddity the moment that the Financial Times told us about the potential for a Google underwriting. Here's why.
We know that speculation is back. We know that things on the pink sheets are boiling up and people can't resist little stocks again. We know that the lessons of the three-year bear market already have been forgotten. I think we have to accept that, and deal with that reality.
Which makes it awfully hard to short eBay (EBAY:Nasdaq - commentary - research) or Yahoo! (YHOO:Nasdaq - commentary - research) or Amazon (AMZN:Nasdaq - commentary - research) or InterActiveCorp (IACI:Nasdaq - commentary - research)
Think back to the dot-com era. Do you remember what really drove those stocks? It was the voting process. People didn't invest. They didn't even trade. They voted. They bought shares in whatever dot-coms they liked the experience of using.
That metric, which is total baloney, has not been killed. In fact, with the evolution of broadband and the acceptance of the Net, I bet it is even more potent. Everybody I know swears by Google. That means, regardless of its profitability or its prospects, Google's IPO will be a breathtaking experience.
We know that unless Google uses an auction system and unless the SEC allows Google to create more supply in rapid fashion to meet the online demand -- I talk about this in my autobiography, "Confessions of a Street Addict," by the way -- you have to expect that Google will dwarf eBay, which is $35 billion. Why does it have to be that way? 'Cause that's the way it is. Irrationality can be gamed only to the upside in this tape.
That means that anything dot-com then will be measured by this new nutty metric, which is what happened in 1998, 1999 and 2000.
This brings me back to the first point: How can you be short an eBay or a Yahoo! or an Amazon ahead of this (ridiculous) re-evaluation from Google?
What can I say? I don't make the rules. I just play by them. "
(in www.realmoney.com)
By James J. Cramer
10/27/2003 12:51 PM EST
"Can you afford to be short a dot-com with Google lurking?
I thought about this oddity the moment that the Financial Times told us about the potential for a Google underwriting. Here's why.
We know that speculation is back. We know that things on the pink sheets are boiling up and people can't resist little stocks again. We know that the lessons of the three-year bear market already have been forgotten. I think we have to accept that, and deal with that reality.
Which makes it awfully hard to short eBay (EBAY:Nasdaq - commentary - research) or Yahoo! (YHOO:Nasdaq - commentary - research) or Amazon (AMZN:Nasdaq - commentary - research) or InterActiveCorp (IACI:Nasdaq - commentary - research)
Think back to the dot-com era. Do you remember what really drove those stocks? It was the voting process. People didn't invest. They didn't even trade. They voted. They bought shares in whatever dot-coms they liked the experience of using.
That metric, which is total baloney, has not been killed. In fact, with the evolution of broadband and the acceptance of the Net, I bet it is even more potent. Everybody I know swears by Google. That means, regardless of its profitability or its prospects, Google's IPO will be a breathtaking experience.
We know that unless Google uses an auction system and unless the SEC allows Google to create more supply in rapid fashion to meet the online demand -- I talk about this in my autobiography, "Confessions of a Street Addict," by the way -- you have to expect that Google will dwarf eBay, which is $35 billion. Why does it have to be that way? 'Cause that's the way it is. Irrationality can be gamed only to the upside in this tape.
That means that anything dot-com then will be measured by this new nutty metric, which is what happened in 1998, 1999 and 2000.
This brings me back to the first point: How can you be short an eBay or a Yahoo! or an Amazon ahead of this (ridiculous) re-evaluation from Google?
What can I say? I don't make the rules. I just play by them. "
(in www.realmoney.com)