The Wall Street Journal has an amusing summary, Beyond the Bubble, of what happened to some of the Internet bubble’s high-flyers:
Amazon’s price-to-earnings ratio soared beyond 400, an astronomical level, and its stock surged toward $100 a share, pushing its market capitalization beyond those of Disney, Colgate and J.P. Morgan at the time.
But the Internet retailer lost the adoring gaze of investors in the past four years, and its stock fall as low as $10 a share.
Amazon’s now over $40 a share.
EBay amazes me:
EBay is one the bubble’s rare success stories. Even as the rah-rah atmosphere of the ’90s evaporated, the online auction site thrived, regularly posting quarterly sales growth above 80%. No company could sustain such performance interminably, though, and eBay’s empire has shown signs of stabilizing.
EBay’s growth now is coming from beyond U.S. shores, and favorable exchange rates have helped pad the bottom line. But that area too may be maturing. Overseas sales growth slowed to 97% in the latest period — slipping into the double-digits for the first time ever, and big vendors at home have been griping about problems. Nonetheless, the company is expanding at a faster rate than other U.S. corporate giants like Microsoft and Wal-Mart at comparable points in their development, says Chief Executive Meg Whitman.
EBay raised its revenue forecast for 2004 by $100 million. Over the last year, eBay’s stock is up 73% — higher than during the bubble. But the shares are pricey, trading at 65 times projected earnings, compared with 18 for the Standard & Poor’s 500.
Lucent sells for less than $4 a share:
For an epochal tale of the excesses of the bubble, it would be tough to do better than Lucent. The company’s shares soared to a split-adjusted high of $62 in late 1999 and management told investors to expect sales growth of 20% a year — all of which seemed reasonable as companies prepared to cope with breathless projections about growth in Internet traffic. But the bottom fell out. Lucent heaped discounts on customers and even loaned companies money to buy its products as it scrambled to meet its unrealistic projections.