Looking For a Bottom

I happened upon a news piece recapping an online pricing mix-up over at
Egghead.com . Apparently, the beleaguered e-tailer
mistakenly listed a memory module on its Web site for just $35 that
typically sells for $335. Predictably, consumers scrambled to add the item
to their shopping carts before Egghead
cancelled the handful of orders after it discovered the gaffe.

What concerns me here is subsequent fallout, which had some angry patrons
threatening lawsuits and filing complaints with the Better Business Bureau
over Egghead’s pricing error and handling of the situation. First off, this
whole affair hardly warrants headlines. Egghead is far from the first
online retailing outlet that’s made an honest mistake, and it certainly
won’t be the last.

Now lean in close, ’cause here’s what I think is the real rub. This
constant piling on has more to do with Egghead’s sorry buck-o-five share
price than the company’s own actions. What’s troubling is that consumers
seem to smell some sort of blood in the dot-com waters, and media types are
all too quick to encourage their bad behavior.

Anyone who’s modestly Net savvy and trades Internet stocks knows that
Egghead is likely light in the wallet, as we speak, while limping toward
some semblance of profitability like some rickety ship bobbing amidst the
rough seas, slowly taking on water. Those same opportunists would also be
aware of priceline.com’s negative publicity
following its ousting from the Connecticut Better Business Bureau less than
a month ago.

So what’s the rally cry from these supposed cheated customers?
Not-coincidentally, either “lawsuit” or “complain to the BBB.” Give me a
break. The RAM costs nearly ten times the listed price, and there’s an
uncanny perception of some justifiable pity for out-of-luck consumers. Get
a life. What’s happening here is an overwhelming negative bias toward
Internet companies on Wall Street that’s spilled over onto Main Street. Now
consumers are looking to exploit that sentiment, and the piling on has
reached a fever pitch.

One needs only look toward priceline’s recent public flogging at the hands
of Johnny-come-lately analysts and media spin-doctors. For more than a
year, the start-up was easily the toast of investors and especially
sheepherders like Henry Blodget and Mary Meeker. But no sooner did
priceline show the slightest hint of faltering than the so-called gurus
from Merrill and Morgan Stanley rushed to tag-team the newcomer into a
smoldering pile of embers.

Despite his own ambitious $150 price target for the name-your-own-price
e-tailer just last year, Blodget wasted little time wiping priceline from
his esteemed boot like some sort of cyber-doggie-doo once the chips began
to waver. And the list of examples goes on and on. Folks, we’ve got to get
a grip. The waffling and incessant follow-on from the pessimistic herd has
snowballed to ridculous levels.

Hmmm. On second thought, scratch that. It’s likely a surefire sign that
we’re close to a near-term bottom in the markets.

Any questions or comments, love letters or hate mail? As always, feel
free to forward them to [email protected].

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