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Music Media

MP3.com goes public: Public goes Crazy 90

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.
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MP3.com goes public: Public goes Crazy

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  • by Anonymous Coward
    >do you people really want to listen to music created in order to make money, or music created for beauty's sake?


    Give me a break. Abig one. It's exactly this kind of rhetoric that strains the credibility of the entire MP3 "movement" (and probably the OS movement as well, since you drew the parallel)

    Sorry, Charlie, but people have been making music because they want to for quite a while now - MP3 isn't going to change that. Anyone with any talent and (more importantly) the character to believe in themselves and drive towards their vision is already out there making music, and the lack of a mega-$$$ contract isn't stopping them. Some get lucky, some wallow in obscurity, but I seriously doubt that the ability to now post MP3 versions of their work is going to be a revolutionary capability for most. This is even leaving aside the fact that something like MP3.com is really just going to turn into another record label - exposure is everything when there are 10 zillion people posting their music, and MP3.com has the name brand at the moment, and will have the influence to make/break artists just like the major labels.

    This argument is _exactly_ the same one that was advanced in the context of writing in the early days of the Web when HTML was hot - "Just imagine - anyone can just post their writing to the web without a publishing deal - it'll revolutionize journalism and literature".
    And guess what happened.....all those closet writers that were'nt getting exposure turned out to be no-talent hacks, and were unpublished for a reason. This isn't to say that things didn't change in the mechanism of their delivery, but when was the last time you heard of any significant work of literature being published on the Net because the author couldn't get a publishing deal.....

    Anyway, I certainly hold no love for large corporate conglomerates and would love to see this democratize the music biz and relegate Mariah Carey, Back Street Boys, Rickey Martin etc etc to a parallel universe far, far away, but I guess I'm just not that optimistic about human nature. At the moment, people use mp3 primarily to get stuff for free, legitimately or otherwise. As soon as they have to pay for it, it will lose its lustre and become just another business.
  • by Anonymous Coward
    Rob, MPPP did _not_ open at $28. It IPO'd at $28. A few privileged folks (insiders, friends, bigwigs) could buy at that price. MPP opened at $92. That's the first price at which any normal person could buy. It closed at $61. If you thought you could "get rich quick" by buying at the open and selling at the close, you lost %30. Oops.
  • Let's be honest - 99.9% of mp3's that are currently downloaded are probably pirated or promos

    Actually I was listening to the CEO of MusicMatch the other day and he had some numbers that were pretty interesting. According to him, only 9% of the MP3's on the net are pirated. Yes that was 9%, not 90%.
  • I intern at MP3.COM and I didn't get any options. I love the company, but maybe I should have asked instead of keeping my mouth shut...

    Seriously though, the stock will settle down to the 30's I think and then pick up. Right now, their revenue is 85% advertising based, on just a few advertisers, so they really need to do some conventional advertising to pick up artists.

    If MP3.COM would say, hand out cards and stickers at concerts, they would reach a crowd that:
    a) obviously likes music, and
    b) probably makes music.

    For MP3.COM to really take off and make a profit, they will need to get some bands that get real airplay. They need to converge the digital medium with say radio. Get some stations to play MP3.COM bands for example. That would help bring awareness to the site and the artists.
    Just my $.02,
  • Exactly HOW do you find out about IPO launches in time to take advantage of them! I always hear about them after the fact! (I knew this one was COMING... but where was the announcement that said, "mm-dd-yy is the date"?!?)

    --synaptik
  • I *tried* to put in an order before it started trading (even after the market openned) and it wouldn't let me do it until it started trading. I use Datek. Did anyone else manage to put in an order before trading started (about noon EDT)?

    And yes, I lost money. Quite a bit in fact. :-(

    Mental note to self: Next time, if it opens at exorbitant prices, WAIT BEFORE BUYING...
  • It will rollercoaster up and down for a while. If you bought it in the $80s (like me) a few minutes after market open, don't panic. I think it will hit that level again.

    They do have several money making possibilities, and with these kinds of stocks they can make an announcement that will send the shares through the roof.

  • Well, they also sell what they call "DAM" CDs, which are CDs that have both the audio tracks (to play in a normal CD player) an the mp3s (so you can transfer to your computer without having to do the ripping/encoding yourself). They keep 50% of the profits from these sales, and give 50% to the artist.

    However, they haven't made a profit yet.
  • >They released about 12 million shares to the public..

    Yes, but they don't sell the whole company -- just a fraction, actually. That's how Jeff Bezos of Amazon and the Yahoo boys became billionaires overnight; each of them owns a significant fraction of their company's stock. Microsoft stock is the vast majority of Bill Gates fortune. If they sold off all the shares in the IPO, they'd also lose control of the company.

    Most stock sources will give you the market capitalization, which is the total number of shares times the current stock price. I think I got my numbers via excite.com.

    It's a weird system. People generally buy stock not for the dividends (with a few exceptions, like utilities, that have pretty consistent earnings), but for the expectation that someone else will want to pay more for it later, and that later person is buying it for that same reason. Generally the only time stock valuation really has direct meaning is when one company buys another.
  • by Eccles ( 932 ) on Thursday July 22, 1999 @04:58AM (#1789976) Journal
    In case you're wondering, the only way you could have made money off of this is if you were one of the original IPO share purchasers, not buying the stock on the open market. (It does say they set aside shares for bands that have songs on their site.) The rest of us would have just lost money on it.

    Sheesh, ~$4 billion market-cap for that company.
  • They've been through the floor! They're a bit better right now, but they're still down on where they were yesterday, and look like they're on a downward trend again.

    Methinks yesterday's high shares were investors wanting to milk the shares for all they were worth, before selling.

    On the other IPO, BeOS seems to be doing ok-ish. Their shares seem to roller-coaster, but not by very much. Certainly, nobody's made any spectacular profit, there.

  • by jd ( 1658 )
    1) It isn't, now.
    2) They aren't.
    3) No.
  • At one point MP3.com was worth 6.9 billion, larger than the 6.3 billion value of EMI. It is kind of ironic that they could become larger than one of the big five music companies. It definately makes me feel good to see people making a fortune on the internet. Maybe one day my little mp3 site http://www.astrojams.com will make me a few bucks but until then, I think I'll stick with my day job at Compaq.
  • Actually, they offered close to 2 million shares at the IPO price to artists and customers of mp3.com. I'm not sure if I consider myself 'normal,' but I got in on it (because I bought a $7 CD a few months ago) and I'm certainly not priveledged. It was a very cool thing for mp3.com to do, and I'll bet a bunch of 'normal' people made a lot of money because of it.
  • I can't buy food with ideas.

    I can't pay my rent with ideas.

    I can't retire on ideas.

    Sooner or later it has to come down to money. Somebody's got to come up with a way to make money off of all of these ideas, and so far the batting average of internet-based companies is pretty low.
  • ((lambda (x) (x x)) (lambda (x) (x x)))

    ...unless all you want is for it to construct a copy of itself and evaluate it in an infinite loop. For a Quine that returns a copy of itself, try this (though I've seen Scheme interpreters that handled quotes differently so you might have to play with it a bit):

    ((lambda (x)
    (list (list 'lambda '(x) x) (list 'quote x)))
    '(list (list 'lambda '(x) x) (list 'quote x)))

    I also have one that makes an infinite loop:

    ((lambda (x)
    (eval (list (list 'lambda '(x) x) (list 'quote x))))
    '(eval (list (list 'lambda '(x) x) (list 'quote x))))

    Don't try this one unless you're quick on the interrupt key -- on MacGambit at least, yours runs forever in constant space, but mine eats the entire heap, almost before I can reach the button to stop it.

    David Gould
  • MP3's business is centered around getting people interested in the unsigned bands, and selling you CDs that the band put out. MP3 gets a certain percentage of the CD sales, and the artist gets mo money. It isn't just a free download site. Notice that no band (at least that I am aware of) has released all the songs on their records as freely downloadable MP3s. They release some free (much like the music industry releases singles) to get you interested in buying the album. Kinda kool, huh?
  • They released about 12 million shares to the public.. Even at $100/share (not a current price) that would be $1.2Billion total capitalization.
    Is there somethign I'm missing here?
    where is the $4B number from?

    Thanks,
    Brian
  • by Dast ( 10275 )
    I would very much like to filter out this IPO junk.
  • In one of those "strange coincidence" things, Doonesbury is doing a series of strips on MP3s (or at least, it was 2 weeks ago, and it's now releasing the strips on the online site):

    http://www.doonesbury.com/dailydose/
  • by xyzzy ( 10685 ) on Thursday July 22, 1999 @05:01AM (#1789987) Homepage
    Wired news had an interesting blurb on this, pointing out that 80+% of MP3.COM's revenues come from on-site advertising, and they lost a few mil last year, but due to the current MP3 hype, and the fact that apparently a lot of people think they own the MP3 technology (!) the company got bid up into the billions.

    Greater fool theory, indeed!
  • I believe they have a bunch of shares owned by various investors on top of the ones released to the public. I don't have any numbers in front of me, but I recall there being significantly more shares outstanding than they just released, which could account for a total company "value" of 4 billion.


    Using Microsoft software is like having unprotect sex.

  • by Outland Traveller ( 12138 ) on Thursday July 22, 1999 @05:10AM (#1789989)
    I will probably catch some flames for this, but I'm not happy with the number of stock-related posts over the last few weeks. So-and-so is IPOing, so-and-so might be IPOing, so-and-so's shares went way up and levelled off, etc. As an anymous poster said earlier, this is getting to be "news for daytraders, stocks that matter."

    I don't really care about any of this. I'm not so egotistical as to think that my opinions should change slashdot, but I would greatly appreciate it if a new "market" catagory could be created so I could have an easier time filtering this stuff out.

    Thanks,
    -OT
  • I really don't understand this. Why is MP3.com's stock selling so high? Don't get me wrong, I like MP3.com, very much. (Besides, they have Sister Machine Gun). But how are they going to make any money? Are ad revenues that good for them?
  • As I see we're in the dawn of a crazy IPO-mania.
    With all hype today about internet, people think they can make money of it easily.
    (I will not be surprised if the same people are the people that answer "make $$$ quick" scams).

    Some hype has gone over MP3, and *bang* MP3.com sales like hotcakes.
    Linux hype? Slashdot is allover that redhat IPO, and soon Caldera and SuSE.
    Anti-Microsoft? BeOS IPO sells!
    Portals and "Web"? See how much Yahoo and amazon makes!

    Basicly all of these (except for BeOS and Amazon) give away their products for nothing,
    but "they will make tons of cash" since they are buzzword related.
    At the end these companies will fall down like pyramid scams,
    this can hurt economy quite much when it does.
    (my bet would be this december, just before "Y2K" hype).

    Investors today don't care about the product, but the name.
    I recall story of a model-boat company changing their name to boat.com -
    they trippled their value within a day before the investors knew they only sell models of boats.
    And this company may have revenues much higher than mp3.com
    (again, how will they make money?)

    This is also the case for the cybersquatters thinking "suckmypole" will sell for $1000s,
    and wondering why noone buys from them.
    Except for mp3.com and cnet, I havn't seen a website that's most of it's value is it's domain(s).


    ---
    The day Microsoft makes something that doesn't suck,
  • While I don't think the .mp3 craze'll last forever, I find flaw in your statement that they "just don't make any money." It's apples and oranges here. Amazon.com has to provide physical GOODS on all purchases. eBay, on the other hand, deals in commision. Thus, they MAKE money(forgive me if I'm wrong, but I'm about 200% sure that's true). Similarly, mp3.com only provides electronic goods, mp3s for download. Sure, they sell Rios and CDs as well, but mostly out of other distributors. I find it hard to believe that they're losing TOO much money with sites like Yahoo! raking it in. Anyway...I say ride that "bubble" while ya can.
  • actually, mp3.com notified all their members (ie. people with music up on the site, i think) about this offering a good few weeks ago, possibly a month, including the information on how to register for purchase of however many shares.

    i'm not a member myself, but i know a few friends who got the offer.

    none of them took it up, of course. heh.

  • As an anymous poster said earlier, this is getting to be "news for daytraders, stocks that matter."
    Yes! I whole-heartedly agree with the jist of both yours and said AC's comment. I have yet to find a reason to filter out any of the stories posted, but as of late the business to tech ratio's become a bit much; IMHO. Or could such stories be shafted under the money topic, IIRC, which already exists.
  • Having a huge presence in an exploding market is worth a lot. Lets say you have a company that makes a Rio competitor. If you could get MP3.com to officially endorse your player, it could make all the difference for your company. Or let's say Microsoft wants to get people to use its audio format - they would pay zillions to get MP3.com to change their name to online_collection_of_Microsoft_media_format_sound_ files.com and endorse the new format.

    It's not all "Click here to get a great price on bicycles!"
  • You can't - IPO launches aren't open to individual investors, unless you have an auction IPO like Salon. (Selling: $10.50. Closed first day: $10.50.)
  • >>I can't buy food with ideas.

    A friend wanted my advice and bought me lunch. Another friend wanted an hour's brainstorming and cooked me dinner. I can buy food with ideas.

    >>I can't pay my rent with ideas.

    The fastest growing method of buying property in Silicon Valley is signing over stock. These people are all "paying rent" with ideas.

    >>I can't retire on ideas.

    Arabs came up with the idea of selling access to the black sticky stuff their camels slipped in. Breeders sell the idea that their prize bull's semen might produce great cows. Plenty of ideas have huge value before they produce a penny in profit.

    >>Sooner or later it has to come down to money. Somebody's got to come up with a way to make money off of all of these ideas, and so far the batting average of internet-based companies is pretty low.

    Here you're right... and this was my only point. Value isn't just about revenues. It's about potential. And the web is only a couple of years into a forty-year phenomenon - which creates lots of potential.
  • I believe Michael Robertson's holding of over a billion in stock makes him worth more than all senior executives of all music companies combined. Great! Someone who believes in freedom... with the resources to fight back. Let's hope it doesn't corrupt him too soon.

    A note for anyone valuing this company (or any other Net stock) by obsolete metrics like revenues: those billions are built on the concept, not the company. Concepts in the end are more powerful than earnings. After all, a little concept called "money" was powerful enough to survive losing the only thing that gave it value - being backed by gold.

    I'd bet people were saying the same thing about paper money then as they say about Net stocks now.
  • It opened at around $80 on the open market, and
    shot above $100. Day traders would have made 25%.

    -WW

    --
    Why are there so many Unix-using Star Trek fans?
    When was the last time Picard said, "Computer, bring
  • E*TRADE makes IPO's open to individual investors.
    Not all of them, but a lot... (it's common for them to get 5 or 6 a week).

    -WW

    --
    Why are there so many Unix-using Star Trek fans?
    When was the last time Picard said, "Computer, bring
  • That's not true. As I said in another post, you
    can get in on a lot of good IPO's through E*TRADE.
    You don't have to be anyone special; just willing
    to hold the IPO for at least 30 days (otherwise
    you won't get any more IPO's... they want
    stability).

    I could have gotten in on the Hoover IPO, which
    increased from $14 to almost $30 yesterday...

    -WW

    --
    Why are there so many Unix-using Star Trek fans?
    When was the last time Picard said, "Computer, bring
  • The reason it rose and declined was because the
    daytraders put in bids before the market opened.
    The sooner the better. Then the market makers took
    those orders on a priority basis, first come,
    first served (best price of course). This
    continued until it hit 105, at which point the
    daytraders began their profit-taking, which
    continued on down to ~$60.

    The only way you lost money on it was if you
    bought it higher than you sold it. If you didn't
    sell it yet, you didn't lose any money. (You just
    missed out on MAKING money for the timebeing.)

    -WW

    --
    Why are there so many Unix-using Star Trek fans?
    When was the last time Picard said, "Computer, bring
  • So how much did you make? =)

    -WW

    --
    Why are there so many Unix-using Star Trek fans?
    When was the last time Picard said, "Computer, bring
  • Well the reason the stock price went so high is
    relatively straight-forward. The market saw a low
    priced stock and thought that it could get higher,
    and then Ohhhh shinny buzzwords.
    Poing poing. Buzz buzz. mp3 buzz, .com buzz,
    intenet buzz.
    I feel like a ferret playing with shinny round objects.
    -cpd
    (if you miss the reference read www.sluggy.com)
  • Buying at the open and selling at the close is not what "daytrading" is about. Daytrading is about buying and selling during the course of the day, taking advantage of small (or not so small) fluctations in price.

    For example, day trader T notices stock RHAT is on an upward trend, so he buys. Some time later, when the trend is no longer upward, he dumps RHAT. Similarly, if stock BEOS is on a downward trend, he sells, and picks it up later when the price bottoms out. Doing this a few ticks (price levels) at a time is known as scalping. Note that T doesn't have to own BEOS to sell it -- this is known as a short sell. Things are a bit more complicated in real-life, because of weird trading rules like no shorts on a down tick.

    So the long and short (heh) of it is this: daytraders probably had a ball (and made a killing) on MP3.com because there was huge volatility. More likely, the unsophisticated traders without real-time market information and execution systems got killed. But that is how the stock market works.
  • Are you sure they really are options?

    Stock options and employee stock purchase plans are two different things. An option means you have the option (imagine that!) of buying shares sometime in the future for a given price. For example, if you have 1000 options for $0.01, and the stock price goes to $2.00, when you excercise it you pay $10 and receive $2000 in one transaction.

    When you just get a special price on your shares, thats known as a employee stock purchase plan. Quite different. If that is what you have, make sure you check out any restrictions on the shares, particularly if the company is not publicly traded. For example, they might sipulate that if you quit, the company can buy them back at $0.01, or whatever. Lots of companys do this to encourage loyalty.

    Incidentally, options are usually better. There is zero risk, because you have the choice of not excercising. With any other stock purchase, the price could go down. Also, it doesn't require the upfront capital, which can be hard to come by, as you point out.
  • Stay good, day stock traders, stay good! - kiki [sluggy.com]
  • It is nearly impossible for an individual to get in on an IPO. A good source of information on stocks and IPOs is Quote.com
  • Does MP3.com have a reasonable buisness plan? How do they plan on making money? It seems like a very good site, but I do not believe that selling ad space alone justifies the market's response to their IPO. I may be missing something, but this seems to be a case of people jumping blindly at a .com stock.
  • I'm a software engineer, and love all news related to technology. Slashdot's announcements of tech. firms going public is key to showing the big picture of how the industry is growing and changing.
    Since BeOS and MP3.COM went public, they are going to be viewed in a new light by investors which may adversely or positively influence their products and services.

    Side note on mp3.com:
    - Only certain people (such as artists on MP3.COM, employees, and big time investors) were allowed to buy mp3.com at the IPO (Initial Public Offering) price
    - The IPO was initially around $12
    - The IPO jumped to $18, $24, and finished on $28
    - When the stock was available for the "everyday stock buyer" the price opened at 92!
    - The stock hit a high of 103, and is now slowly slumping back to it's real worth. (At this writing it is 55.

    For more information try going to
    Datek Online [newsalert.com] which is a free site for stock info and quotes.
  • heh, they posted a repeat story, and then 2 minutes later they try to cover it up by removing it.

    What has rob been smoking?
  • Well, I'm not going to flame you, sounds to me a pretty fair comment you're making.

    I'd make one other suggestion though. How about a upcoming-IPOs-which-will-make-you-very-rich category, or is that asking too much?

    Nick Barnes
    (who's missed out on every single IPO going so far)
  • by watanabe ( 27967 ) on Thursday July 22, 1999 @06:02AM (#1790013)
    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.
  • The stock really opened at around 92 and went to
    105 within minutes of opening. Check out yahoo to see down to the minute numbers. The reality is unless you were preallocated shares before the market opened you took a beating on the stock. It basically declined from 10 minutes after it opened until the market closed. I would venture to say that almost everyone who bought it on the market lost money on it yesterday.
  • Exactly. It seems to me that the people/organizations really making money on these internet IPOs lately are the underwriters, not us poor slobs wishing we were day trading our way to retirement.

    Most of the comments expressing amazement at the range in price seem to be based on the implicit belief that it's possible for Joe eTrader to take advantage of those price swings from his/her PC.

    I've never traded a stock in my life (just have mutual funds) so you can take this with a grain of salt, but it sure seems unlikely that with the resources of an amateur one could keep up with this kind of market. My take on trying to make money at it is that you'd better (a) have solid brass balls/ovaries, (b) have deep pockets, (c) not be distracted by your real job while you monitor the wild price swings, and (d) have a very low latency betweeen when you decide you want to buy/sell and when the trade actually takes place. In other words, you'd be best off if it was your full-time job.

  • Thanks for the clarification. Still, as you say, you have to hold the IPO for 30 days, which is a lot longer than the time frames everyone's talking about here. The big changes (like $14 to $30) are mostly taking place in the first day, if not the first couple of hours.

    The percentage gains per unit time are seductive; I think regular folks don't have great chances to take advantage of them.

  • Try something easy like two dice superimposed on a dollar sign.

    Will in Seattle
    money, money, money
    should be funny
    in a rich man's world
  • You can always check out Edgar-Online's IPO Express [edgar-online.com] for upcoming offerings. Right now they have offering notices up through the end of August. Of course, all of these are tentative, but it gives you a great idea who is coming out soon. (Also, a company can withdraw or be added at anytime. Check it daily :-) )

    You can't buy through here, it's only there to inform and educate....


    --m


  • Even if they aren't real options (which you don't need any cash to exercise), if it's, for example, an employee purchase plan which just allows you to buy stock itself at a discount you can raise the money by selling the stock short...

    Sell 100 shares of stock at $20 on the open market. Take $1500 of the $2000 in cash you have from the short-sale, give to company in exchange for 100 shares at the discount price of, say $15.
    Now you owe someone 100 shares in one account, but in some other account you have these shares you owe, plus you have $500 in cash.

    Make $5/share without putting out ANY serious cash.

    The only problem with this is if the stock shoots through the roof and you have a fixed "waiting period" before you can actually take delivery of the shares you purchased at the discount price... Because the broker will require you to keep a "margin" (basically some percentage of the amount that the stock you owe is worth)

    If your company were large, you could buy open-market call options which would cover your risk, but eat into your profits.

    But don't pass up an opportunity to make GUARANTEED MONEY because you don't have the cash. If it's really guaranteed the way this sort of thing is, there's no risk to someone who lends you money and they get a cut. Banks will do this for you, so at the very least, you could borrow money from a bank to cover the margin.
  • I'd make one other suggestion though. How about a upcoming-IPOs-which-will-make-you-very-rich category, or is that asking too much?

    Good idea, bad choice of words...I don't think Rob would want to set himself (and andover) up for a potential liability by describing these IPOs as something that will make you very rich. Three problems:

    * It's illegal to make [technically] unfounded claims about a potential investment.

    * Whose definition of "very rich?" eg: If Bill Gates and I each purchase 100 shares of buzzword.com, inc. and the price goes up by 400%, whose overall net worth would increase by a higher percentage?

    * Some idiot could see news about buzzword.com's IPO under this category, invest in it, possibly lose money, then call his local, friendly, neighborhood shark^H^H^H^H^Hlawyer and sue Rob (and andover) for false claims about the investment. You're fooling yourself if you say it couldn't happen.

    Earlier, someone suggested using a Tulip as the logo for the internet IPO category...excellent idea! There's a web page somewhere that talks about a tulip-buying craze in Europe in the 1800s and how it relates to a lot of these flaky internet companies' IPOs now. hehe, maybe "from the tulIPO department?"

  • Yeah, but the major indexes (DJIA, S&P500, NASDAQ Comp.) are all down, too, at this minute.
  • Sounds like a great idea to me. I personally have little interest in the stock market, and it would be nice to be able to filter out the continuous stream of IPO articles


    Tell a man that there are 400 Billion stars and he'll believe you
  • has anyone heard the MP3.com radio commercials??
    i heard "mp3.com, where the world goes for music" no more than 30 minutes after i read this story,
    i almost threw up.
    public goes crazy, along with marketing..

  • woah.... where did those numbers come from?? i wanna see some more.

    just from personal experience, i seriously doubt 9%. but maybe the CEO of MusicMatch knows something i don't.
  • I recall hearing something on NPR last summer about a smallish company on the Atlantic coast (Maine? Massachusetts?) who made fishing nets. I can't remember if it was because they went public or because someone suddenly noticed them, but their stock values skyrocketed one day "because the company name included the word 'net'". That seems truly silly to me...
  • Somehow the CEO of a company that sells mp3-ripping software doesn't seem like the most objective source to me...
  • Check out IPO Central [ipocentral.com], part of Hoover's Online. Lots of good info on one page concerning the relevant IPO. Another good source is Yahoo! Finance [yahoo.com]. But beware that not everybody gets to purchase initial IPO stock before it hits the big boards.
  • Yup. You put your finger right on it.

    Ideas are the currency of the Net. Every in this forum asking "Why are they valued so much? How do they make money?" are missing that point.

    I believe that many investors in MPPP realize the potential for MP3.com to something really neat with a billion dollars. And that would be the dismantling of the old recording industry business model. The era of rock superstars and big budget multimedia extravaganza concert tours is over, and musicians will be kept in coffee hours and nightclubs where they belong... :) It'll keep em honest if anything.

    I mean, c'mon, do you people really want to listen to music created in order to make money, or music created for beauty's sake? Damn, this parallels the Microsoft vs Free Software debate. I personally believe that M$ is better at making money than software. Which is why I hang out wid you idgits.

    So there.
  • I wholeheartedly agree.
  • barring any new comptetion and that mp3.ocom stays in the lead, does anyone think that maybe the riaa woould be intrested in the purchasing of many shares,m being that they are afraid of the low costs for artsist making music, so they could make some of the money at least to avoid having lost most of the industry?
  • I work at a place that will eventually go public, probably after y2k rolls through, just to hang until most of the stupid shit gets worked out.

    Now, I'll be getting "options" to buy at a greatly reduced price, but what good is that if you don't have the money up front to buy the bloody stock? From what I have read you have to buy stock in certain sized chunks, so if you don't have the kind of bread needed (no pun intended ;) you're out of luck.
  • ??????????????

    Please pardon my ignorance, I'm not acting stupid. No, really, I'm not acting -:)

    People really do this? I mean, give you a loan based on a potential for stock revenue? If I have you right, I can borrow money toward buying stocks, buy the stock, sell it right off the bat, pay back the loan (and the IRS :P) and shniv off with the profit?

    Holy shit.
    No wonder people are making bundles on this sort of thing.

    Thanks. I honestly had no concept of what I had been "given". I mean, the stock still has to actually go _up_ once we go public, but still... wow.



  • I am sure that the owners of these companies are ecstatic but this company and their ilk - amazon, barnes&noble online, ebay ,etcetera, etcetera - just don't make any money. Yes they do have "exposure" but I cannot see them ever actually making money. If you are a serious longterm investor I would be "very careful" about where I put my money.

    Great for a short-term flutter but the bubble WILL burst.
  • This is really not necesary... most full service brokerage firms (we do at least) will simply give you a loan to purchase the shares at the striek price. You do however, have to turn around and sell the shares so you can immediately pay of your loan.
  • However, generaly speaking, the unsophisticated "investor" has done the best... by far.
    This can be proven by simply looking at the results of the 1,000's of investment clubs around the country. And the fact that the majority of them beat market averages each year, and also beat the vast majority of the paid "expert" portfolio managers (mutual funds) out there.
  • Historically, IPO's have only had a 5% average annual return for the next ten years after their initial price surge. These are not good investments to "buy and hold".
  • As soon as we see this bull market lose its steam, you are going to see a lot of shit hit the fan. Over the past 9 years, you could have thrown money at virtually anything and made money at it. This will not be the case forever.

    And you are correct, day traders that use internet brokers are getting ripped off because they will often receive very poor execution. Because of this, they will often lose more money than they are thinking they have saved from the commision of a broker.
  • People have to realize that the first out of the gates, is very unlikely to make it.

    For example, let's say you got into the computer craze in 1984. You knew computers were going to change the world as we know it, and you wanted in on that action. Well here are a few of your choices at the time (see how many you can remember):

    Apple, Atari, AT&T, Burroughs, Coleco, Columbia Data Systems, Compaq, Digital Equipment, Eagle, Franklin GRiD Systems, Hewlett Packard, Hyperion, IBM, ITT, Kaypro, Mohawk Data Sciences, NCR, Olivetti, Osborne, Sanyo, Seequa, Sunrise Systems, Tandy, Tava, Televido Systems, Texas Instruments, Victor Technologies, Xerox and Zenith.

    Obviously most of these companies are not in the PC business anymore, and many of them are not even IN business anymore.

    This is a losing game. Those that did the best, invested in companies that were already well established, such as IBM, Hewlett Packard and Texas Instruments. These were companies that were already profitable, but stood to gain even more as computer sales took off.

    There will be a few pure web companies that make it, and become hugely successful. But your chance of finding those few will be slightly better than winning the lotto. AND chances are, those companies have not even formed yet.

  • ??????????????

    Please pardon my ignorance, I'm not acting stupid. No, really, I'm not acting -:)

    People really do this? I mean, give you a loan based on a potential for stock revenue? If I have you right, I can borrow money toward buying stocks, buy the stock, sell it right off the bat, pay back the loan (and the IRS :P) and shniv off with the profit?

    *We only do it for employee option agreements though. That is important to realize. This is a case where you really are guaranteed to be able to pay off your loan.

    In regular accounts, you are normally allowed to set up a margin account. This essentially allows you double the buying power of how much money you have in the account. So that is also, essentially a loan, but you do need to have some dough upfront for that.

    But anyways... by all means, take advantage of any stock options your employer gives you!
  • Hindsight is always 20/20....
    yes indeedy.
  • You're pretty much right on the money (no pun intended).
    Day trading (not addressing IPO's here) is getting a lot of press lately, but is is fiendishly hard to make any money at it. About the only ones making money are the ones that run Day Trading advice sites, and even then it's only because they manipulate the market to make the $$$. [okay, overgeneralization, but not too far from the truth] It is, absolutely, a 'full time job' any time you're doing it- seconds can make the difference, forget minutes. For the most part, it is a purely technical operation - it is based on market dynamics by looking at the bid/ask spread and market depth and placing trades based on that - which is why in general Day Traders use brokers that are targeted specifically at them. The generic ETrade site, for example, doesn't have the facilities to support Day Traders (though they have a 3rd party agreement for Power users, which takes it part way).
  • Agreed.
    the run-up on internet stocks _is_ based on ideas. It's based on the idea that nobody really understands the Internet yet, other than the fact that it's going to become pervasive, which means that there is lots of potential. Nobody is really sure how people are going to make $$$ on the net in the long run, and so people are simply placing their bets on the folks that generate a lot of traffic to their sites, or who seem to have cool ideas that might get them there.
    However, I think we're at least glimpsing the end of this speculative phase. The 'advertising' gambit has pretty much run it's course, and the verdict isn't too positive. Amazon is still losing money despite being a virtual unqualified success in terms of the experience of actually shopping on the net - people are realizing that market share isn't necessarily worth that much, since the margins are vanishingly small if not negative. Yahoo has 50 kajillion people through it's site every day, but still has very low revenue (relatively speaking).

    My guess is that online retailing will be 'successful' in generating lots of traffic/revenue, but the margins and complete lack of customer loyalty will mean that they are not appreciably more profitable than conventional retailers, and that eventually this will come out in the valuations. It's also only really successful in the 'commodity' markets, where people are shopping for items they already know they want - I am yet to be convinced that the web is sufficient to replace in-person shopping in many areas - ie would you buy food on the web?(nothing fresh, for sure) Furniture? (maybe). clothing? (catalogs already have defined this market - the web will take it over, but not turn any more significant profit...)
    The only really long-term viable ventures i see right now are subscription-based content providers, but they are far from being ready, since the 'web content should be free' mentality still reigns, and the technology is still evolving. The 'big' web companies in the future will compete with TV and print media in offering content, but since the advertising paradigm that fuels the conventional media doesn't work too well on the web, they'll have to figure out how to charge people for it. This isn't too bad, IMHO - I'd gladly pay 10-15/month for /. in it's current form, but I'm probably the exception.

    (I should point out, though, that online brokerages do really make sense to me - huge value-add for their target market. Online banking makes sense to me as well, although I don't quite see the same type of revenue stream.)
  • Yep, this guy is on the money. I wish i had the IPO connections! Stocks like yahoo, amazon, and mp3 will probably do well for a few years, but once the market matures a bit, they are history! These ventures depend on being THE source to buy their product. In the internet future though, buying decisions will not be made based on "brand recognition" or whatever you want to call it. Decisions will be made based on other criteria. You design your criteria and share it with your shop-bot who queries the net and reports back. Or maybe your shop-bot "learns" your shopping preferences based on your behavior; it doesn't matter, the point is, it is unlikely that you will head to your favorite internet store to make a purchase. This is a leftover concept from the world of brick and mortar. It's just a matter of time until the headstart these trailblazing companies have will be extremely minimized. How much time? now that's the question! I own some of these stocks too! And i'm definately not selling right away!
    peace.
  • I detest Mp3.com. No good music....lousy website interface...It's a scandal that such a shitty enterprise should be making it big time.

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