A quiet week, really, with the market sort of holding its breath in anticipation of what Greenspan will (or won't) do next Tuesday, and sort of--but not really--paying attention to what's going on in Iraq. The only thing that wasn't quiet this week was the Internet stock bubble, which blew out another twenty or thirty miles, taking good, bad, and ugly companies along for the ride. On CNBC today, Joe Kernen (as far as Moneybox is concerned, TV's greatest hero) said, in reference to the rise of eBay and Earthweb, "We wouldn't want to say that this is the greater-fool theory at work, but it makes you wonder," and his head shake made it clear that that's exactly what he wanted to say.
Of course, one good thing about all this is that you'll probably meet twenty or thirty new Internet-stock millionaires at this weekend's cocktail parties. If you do, make sure they buy you a drink, and a real one at that. Don't settle for J&B. Insist on 18-year-old Macallan.
And so on to this weekend's talking points.
1. "Earthweb went public at $14 a share on Wednesday and rose as high as $76 a share on Thursday. Two questions: Why didn't the investment bank price the offering better, so that the actual company could have gotten some of that extra lucre? and Doesn't this mean Slate is worth oh, five or six hundred million dollars? We do have that .com at the end of our name, after all."
2. "The week's really big winner, though, was eBay, which skyrocketed to $130 a share, almost double where it was last week. eBay is an online auction house. It exploded this week, along with the other Internet stocks, after a survey suggested that many more people were going to do their Christmas shopping online this year. Is eBay really counting on a lot of Christmas traffic? Great: 'Thanks, honey. A Banana Splits lunch box. Just what I always wanted.'"
3. "Compaq announced that it would begin selling computers direct to small businesses, and in an attempt to placate its distributors, is going to pay dealers a 6-7% commission for every customer they refer to Compaq's direct-buying program. Why doesn't Compaq just pay the dealers to turn themselves into oil-change specialists and be done with it?"
4. "The New York Times ran a pull quote Thursday that read: 'It probably doesn't matter what the Fed does next week.' Just the kind of thing that could inspire Greenspan to slash interest rates. 'Do you still think it doesn't matter what I do?'"
5. "The biggest surprise of the week--Internet stock frenzy isn't surprising anymore--was Intel's announcement that its fourth-quarter revenues would be up 10% and would handily beat analysts' expectations. Rumors of the semiconductor industry's death appear to have been greatly exaggerated. Or maybe it was just the rumors of Intel's death. Merrill Lynch analyst Tom Kurlak set a short-term price target of $60 on the stock not long ago. Doh!"
6. "Chrysler became DaimlerChrysler today. Think of how happy all those U.S. senators must be. Now they can drive their Mercedeses during their election campaigns without worrying about being assailed for their lack of patriotism."
7. "Just after IBM reported terrific third-quarter earnings, sending its stock to record heights, a whole host of corporate insiders sold a total of 350,000 shares. Time to elect a new prime minister, I guess."