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MP3.com goes public: Public goes Crazy
mykey2k writes "Anyone remember this story back in March? Well, MP3.com went public Wednesday. There's a story here, which seems to have some details. "
It opened at $28, and went over $100 a share before leveling
out the in the $60s.
MP3.com's stock is so high because people are
buying into the idea of MP3s with
MP3.com, not any profitability, etc.
You make a bet with MP3.com that it will become
the dissemination spot for MP3s in the
next few years, and that owning the online
MP3 market is worth something.
That's the reason it's bid into the billions;
people are buying a chance at ownership of
all online MP3 distribution.
If this doesn't make sense to you, then amazon.com
stock prices probably don't either, for the
same reason -- people are buying the risky
chance that amazon.com will become the online
clearing house for many goods.
Note that amazon.com is down today on their
earnings reports, which are not substantially
lower than analysts expected. What's lower
is the volume growth in revenue -- the market
is upset that amazon is not growing quickly.
They're perfectly happy to fund a cash-loss
business scheme at this point, as evidenced
by amazon.com's market-cap. They're not pleased
that amazon.com's growth is slowing.
It will be the same story with RedHat --
the market will be buying "Linux" by buying
redhat. Expect it to be huge.
Incidentally, I did get in on the MP3 IPO.
Tripled my money in 2 hours. I will do the
same for RedHat if I can get any shares.