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Stocks T / The Knot, Inc.


Subject:  Re: time for monthly KNOT post? Date:  9/5/2000  2:32 PM
Author:  JGOwens Number:  25 of 127


It's important not to confuse business momentum with stock momentum.

I wasn't confusing the two, just alluding to the fact that one (valuation) usually follows the other (top and bottom line growth).

Most retailers sport low P/S multiples, not unusually in the 1-2 range, and often below 1 (see Staples). KNOT has a great market niche and may well show explosive growth but until that happens I stand by my statement that they are fairly valued.

If they settle in at a multiple of 1, and ramp sales by 100% every quarter as you suggest, then the stock price should at least double every quarter to keep pace. At that point, and especially when profits follow, they will earn the right to an even higher multiple which should lead to an explosion of valuation.

I never implied that I don't think there is excellent opportunity here, because I do. I'm just conservative by nature and I want proof before I commit my hard earned $$$. And I'm willing to miss some of the move up in order to get that proof.

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