Dueling Fools
March 17, 1999
eBay Bubble?
eBay price (3/16/99): 157 13/16
Poison pens going once. Going twice. Sold to this week's eBay <% if gsSubBrand = "aolsnapshot" then Response.Write("(Nasdaq: EBAY)") else Response.Write("(Nasdaq: EBAY)") end if %> Duelists. The popular online auction site has generated quite a bit of excitement on Wall Street in its brief six-month life as a public company.
Now the Rule Breaker portfolio's latest purchase gets our Dueling Fools treatment. Rick Munarriz (TMF Edible) is a bull on the block. Paul Larson (TMF Parlay) is shaking his head at the bidding frenzy taking place. Will a signed Duel transcript be on its way to eBay or is it a bubble waiting to burst?
And don't miss this week's Duel Flashback, where we see which Fool got the long end of our Duel on shorting stocks.
You Get to Vote!
Once you've read the arguments and the rebuttals, it's your time to cast your vote. We'll tabulate results each week and revisit them from time to time to see whether you were right! As always, we invite you to join us in the Dueling Fools Message board to continue the duel.
[Any suggestions, comments, praise, or flames, please send them along to the Dueling Fools Team.]
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The Bull... Let me start by stating the obvious: You will be hard-pressed to find a cheaper stock than eBay. Seriously. I know $18 billion today may seem like a lot of market cap. $12 billion sounded pretty high last month when our own Rule Breaker portfolio bought in and, to some Barron's columnists, even $2 billion the day after the company went public in September was overdone. However, relative to the few Internet companies that are also profitable like $88 billion America Online and $36 billion Yahoo!, eBay is a bargain. Continue... |
The Bear... While I run the risk of being called "Wise" by my Foolish associates (the ultimate slam) for agreeing to argue the bearish side in this Duel, I won't hesitate to say I think eBay has a much tougher road ahead of it than many seem to be thinking around here these days. The eBay site, as it stands now, is ripe for fraud, and there are some serious roadblocks to the spectacular growth the Bulls are betting on. More importantly, today's exorbitant valuation placed on the stock has all the good news (and then some) already priced into it. Continue... |
Results for last week's Jobs vs. Gates Duel
| Answer | Percentage |
| I can't make up my mind |
1% |
| TMF Max's Bull argument |
79% |
| TMF Puck's Bear argument |
13% |
| They were both excellent |
3% |
| They were both lame |
4% |