The market was very quick to react to this information, with shares of eBay rising $11, past the $72 target we set in early July. Given this, the immediacy we felt investors should have had towards buying eBay is now somewhat diminished.
While this quarter didn't feature the growth acceleration of the last two, the degree of upside in spite of the impact of buyer confusion over the change in search results is encouraging.
While the quarter was a solid one and forward guidance positive, we believe that valuation is stretched.
Yahoo's revenue in the quarter was just below consensus, with profitability lagging further behind.
It gives them another reseller out there, and obviously Cisco has a big base of clients. Having Cisco selling your products is absolutely a positive.
We continue to believe that no company is better positioned to benefit from the success of PlayStation 2 and the overall expansion of the gaming space as move into a new platform cycle than Electronic Arts.
Electronic Arts is up 40 percent since the company reported second-quarter results on July 25. Though this has occurred faster than we expected, we are confident that there is still plenty of room for appreciation as we approach the Oct. 27 launch of PlayStation 2.
We believe that this quarter's results will be the final straw for some of those investors that were taking a leap of faith on Amazon. While we believe now is the wrong time to throw in the towel, the market will likely take a 'prove it' attitude towards the company's future.
