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Ecommerce Stock Meltdown 2,0

Lost amid the financial/housing problems

     
7:51 am on Jan 17, 2008 (gmt 0)

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Got quotes on 20 of the larger ecommerce related publicly owned firms. Was astonished to see that ALL 20 were selling well below their level of just three months ago.

Eyeballing my list, I'd say the average loss is an incredible 25-30%. Amazon was the BEST performer, having fallen from the low 90s to $80 yesterday.

Among the doggier issues, stock market bad boy Overstock plummeted from the mid-30s to $11.
1-800-Flowers and jewelry seller Blue Nile were off nearly half.

The NASDAQ average dropped about 13% during that period, the Dow and S&P about 11%.

Compare this dismal ecommerce stock performance with that of headline grabbers Citigroup ($42 to $28) and Countrywide Financial ($16 to $6).

12:30 pm on Jan 17, 2008 (gmt 0)

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Is that so surprising though? From what I've seen most retailer stock is down, and at least in the UK high street retail sales figures for the holiday period were down on expectations.
1:11 pm on Jan 17, 2008 (gmt 0)

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Yeah,after the announcements of 6.5% wholesale costs those major retailers who try and put the squeeze on the market on price alone will PAY the price
2:50 pm on Jan 17, 2008 (gmt 0)

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Good point about B/M retail tanking too. So is this ecommerce drop more about the general retail malaise?

Checked 25 disparate mostly-B/M U.S. retail stocks and found 24 of them off during that period. The S&P Retail Index fell 21%.

However that index is weighted toward giant Wal-Mart, the only rising retail stock in my study. It was 44 around Nov 1 and 47 yesterday. WMT aside, I guess the average retail stock is off nearly 25%.

Ecommerce stocks have certainly done no better than the broader retail market, and likely a bit worse.

12:46 am on Jan 21, 2008 (gmt 0)

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Easily, we're in an ecommerce bear stock market:

"By one common definition, a bear market is marked by a price decline of 20% or more in a key stock market index from a recent peak over a 12-month period."

8:29 pm on Jan 21, 2008 (gmt 0)

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And, we're in a bear market in dozens of other industry segments (retail, restaurants, financials, housing, small caps in general, etc.). I'm not sure I understand the point.
9:59 pm on Jan 21, 2008 (gmt 0)

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double post

[edited by: jsinger at 10:04 pm (utc) on Jan. 21, 2008]

10:00 pm on Jan 21, 2008 (gmt 0)

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Point is ecommerce stocks are falling as much as those sickly sectors and no one is talking about it. Not even on the web! (I've looked)

This dive is utterly different than the bubble collapse when insane expectations confronted reality. Stock prices collapsed. Many firms failed as vital cash injections from venture capital ended. But web commerce grew nicely throughout the 2000 - 2003 nadir.

Small ecommerce companies that were sensibly managed and financed (most of us here) did very well. The surviving publcly owned commerce firms are now mostly profitable and their stock valuations are more in line with other businesses.

What's going on now? Is ecommerce just another cyclical business like cars or banking, or God forbid, home builders?

My guess is the problem --this time-- has to do with a glut internet sellers and a leveling off of online buyers.

10:21 pm on Jan 21, 2008 (gmt 0)

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heh, i am wondering what these web 2.0 balloons will feel like 3-9 months from now.
11:01 pm on Jan 21, 2008 (gmt 0)

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The entire market, with the exception of commodities (i.e. DJP or GSG), is in a substantial decline over the last three months. Take a look at the broad retail and consumer goods indexes (i.e. RXI, XLY, XLP, IYC, XRT). They are all down substantially. There is a broad fear that we are in or entering a recession which is never good for retail (i.e. eCommerce). Comparing small cap retailers like Blue Nile or Overstock to the Dow (30 companies!) or S&P 500 is pointless.

My guess is that your guess is just that, a guess.

11:19 pm on Jan 21, 2008 (gmt 0)

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sounds like it is getting near time to start buying....
12:22 am on Jan 22, 2008 (gmt 0)

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My guess is that your guess is just that, a guess.

Guess... in the sense that an experienced pilot (and owner) of a jet looks at a lot of dials and controls, reads reports, makes visual and radar observations, confers with his crew and ground control ... and then makes a "guess" about the progress of his flight.

12:26 pm on Jan 22, 2008 (gmt 0)

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The stock market is the stock market and ecommerce is ecommerce. It's my belief that ecom is stronger than ever right now. People are jumping ship from the stock market and buying up ecom sites. The dot-com bubble has made ecom stronger, the pipe dreams are gone and real business has emerged. Consumers are still flocking to the internet to make purchases. Rural communities have more access to high speed internet and less access to cheap gas.

My to-do list for today:

1. Buy electric car
2. Buy 2 foreclosed houses
3. Build more ecom sites

12:06 pm on Feb 27, 2008 (gmt 0)

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From January 17:
Amazon was the BEST performer, having fallen from the low 90s to $80 yesterday.

To update, AMZN is now $71.69. Google, which I didn't include among my 20 retailing stocks, has collapsed from $700 a few months ago to $464 yesterday.

The broad market has rallied. but ecommerce not so much.

1:40 pm on Feb 27, 2008 (gmt 0)

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Just run some numbers

As of today, the share price of Amazon is $71.69, which is nearly 30% off its peak of $101.9

On a similar vein, the share price of eBay is $27.51 today, almost 35% off its peak of 40.73.

More dramtic still, the share price of Google is $464.19, which is almost 38% off its peak of $747.27.

10:39 pm on Feb 28, 2008 (gmt 0)

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..sounds like it is getting near time to start buying....

I was just thinking the same thing....

11:14 pm on Feb 28, 2008 (gmt 0)

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..sounds like it is getting near time to start buying....

I was just thinking the same thing....

Most bubble dot coms never came back. Pets.com (the sock puppet company), Boo, Etoys. All sorts of home delivery grocery stocks such as Webvan. Had an elderly uncle who bought e-music at its IPO (he didnt even own a computer).

X10, the hidden camera company, came within a hair of going public

5:54 pm on Feb 29, 2008 (gmt 0)

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Bellwether e-commerce stock AMZN has fallen from 72 to 65 1/2 in the past few days!
11:18 pm on Feb 29, 2008 (gmt 0)

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Just because it is a dot com does not make it a bubble.

Some are, but I seriously doubt that places like Amazon will go away.

1:05 am on Mar 1, 2008 (gmt 0)

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I started my business at the tail end of the last dot.com boom.

All the "ill-funded" companies crashed, and I was there to pick up some of the pieces.

Related: Does anyone remember the name of the company that used to pay people to "surf" their site?

I think they paid out a million per week.

1:32 am on Mar 1, 2008 (gmt 0)

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Fun to remember some of those dumb business models. One startup tried to sell a device to add SMELL to computers.

There was a company that gave away free computers but you had to use their browser which was loaded with ads. X-10 almost want public to sell tiny cameras to spy on women (well they didn't actually say that. LOL)

Bubble landmark: "In 2000, Network Solutions was acquired by VeriSign, Inc. for $21 billion."

3:40 pm on Mar 4, 2008 (gmt 0)

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Bellwether e-commerce stock AMZN has fallen from 72 to 65 1/2 in the past few days!

Now 61 1/2

Anyone know of a stock index that only tracks ecommerce issues? I follow ^DOT and ^QNET which track internet stocks in general.

3:31 am on Mar 10, 2008 (gmt 0)

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I've been a trader for 10 years and I can tell you beyond a doubt that we are in a recession. You won't hear many people say it because they don't see it yet and you won't hear the government say it because they don't want you to know it or to make it worse and they won't usually talk about it until it's over.
11:55 am on Mar 10, 2008 (gmt 0)

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We are in a recession.. this time it may as well be the "great credit crunch". I have excellent credit yet daily i'm getting letters from banks showing they're shrinking my CL's, canceling unused cards and all sorts of stuff. Hell, i think amex does the cl dance monthly now.

will be interesting to see how this pans out.

12:35 pm on Mar 10, 2008 (gmt 0)

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they're shrinking my CL's, canceling unused cards

I've gotten the same notices, I find it more amusing than anything. I actually got a credit card offer from a well known company on the same day that I got a notice of cancelation (for non-use) from the same company.

The good news is that we went through pretty much the same thing in the early 90s.

4:30 pm on Mar 10, 2008 (gmt 0)

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we went through pretty much the same thing in the early 90s.

Set your clock for the next one. We went thru the same thing about every 15 years since the stone age. Since the 30s, bank deposits are Gov't guaranteed so most savers only look for the highest yields and have no concern about bank safety.

Bank deposits should be only 90% guaranteed over a tiny amount, say $5,000. I believe that's the way England does it.

Rewards should be built into the system for conservative banks. Something to be said for grey haired geezers running banks and not just hotshot young math PhD's who know how to game the system with indecipherable financial "Products." Most have no interest in that bank beyond their next pay raise.

Very much like Dot Com execs in the 90s. Loyalty was to their stock options, not to the business.

10:34 pm on Mar 10, 2008 (gmt 0)

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We are in a recession.. this time it may as well be the "great credit crunch". I have excellent credit yet daily i'm getting letters from banks showing they're shrinking my CL's, canceling unused cards and all sorts of stuff. Hell, i think amex does the cl dance monthly now.

will be interesting to see how this pans out.

I'm mostly just seeing the opposite.

I'm getting cards sent to me that I didn't ask for and credit limit raises that I didn't request.

AMEX did suspend our ability to carry a balance on our business card a while back, but they've shown no lack of desire to let us run up as much as we want each month.

As yet, none of either our personal or business credit limits has been altered.

The real test will be later this year when we look to expand our manufacturing capacity. Ours should be "easy" as we've got outstanding personal credit, and our business has a good track record of sales, profits, and growth along with a healthy balance sheet.