Here We Go Again, Rate Fear Slams Stocks
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Market schizophrenia takes over again as stocks fall. That follows yesterday's overall market rise. The great debate continues to be interest rates and if they'll rise. It's one reason those Internet companies that did secondaries may be better positioned than those that haven't cashed up. Why? they raised capital when it was cheaper to do so.
Warren Buffett is a master at that, knowing money won't always be cheap. Amazon.com did a similar move with the $1.5 billion in junk bonds it sold and the $2 billion shelf filed. That's how Amazon stays in the long game beyond books and music, two very low margin businesses.
If you read the recent Barron's on Amazon with the cover "Amazon.bomb" the one glaring hole that any real investor or analyst should see: AMZN on a bond/cash per share basis is worth more than the $10 Barron's said the stock was worth. The bonds and shelf alone add up to $21 per share. If they're going to analyze a stock perhaps they should do just that.
Also, with Disney Internet leader Jake Weinbaum leaving, some key Infoseek execs already gone, it may be better to have one captain and why not Mickey Mouse, or Steamboat Willie. You know what Wall Street really wants to see from Disney? some imagineering with its Web efforts instead of the me-too portal model it has followed. Over time I think Disney's Internet could find a substantial valuation. 36 months is my time target for this to be a world-class Web firm. If not by then the window may be closed. My bet is Disney makes it big here.