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Table: Beware the Bear


Money manager David Tice racked up strong returns in 2000 betting against top tech companies. Here's a sampling of companies he thinks are headed for a fall this year.

Amazon.com

Tice has been bearish on the e-tailer since 1997, and finally made big money last year when the stock dropped 80%. He thinks Amazon (AMZN) manipulates its earnings numbers to portray its performance in the best possible light. For example, as growth has stalled in the company's books, music, and video category, Amazon has pointed to its consumer electronics business as the driver of growth.

eBay

Tice admits to being impressed by the continuing strong growth at eBay (EBAY). Still, he thinks an "ever onward and upward" optimism has resulted in an overvalued stock, with shares trading at 180 times estimated earnings for 2001 and 100 times 2002 earnings estimates. eBay hasn't shown signs of faltering so far: Its stock is up 94% for the year, to $64.

America Online Time Warner

Tice has been wrong about AOL (AOL) for years, but he's not giving up. AOL cited free cash flow of $651 million in its first quarter this year, even though Tice argues cash flow was only $70 million after it paid to settle a lawsuit related to Time Warner's sale of Six Flags entertainment parks. AOL says his interpretation of the numbers is wrong.

Yahoo!

Even after the stock of the top Internet portal collapsed last year by 86%, Tice is bearish on Yahoo's (YHOO) prospects. He says it's valued as a growth stock--and it's no longer growing. At $17.64, Yahoo's stock trades at 350 times its estimated 2001 earnings, a very high price-earnings ratio. Yet Yahoo's revenues are expected to fall 35% this year, and earnings are projected to slide more than 50%.

Data: David W. Tice & Associates, Bloomberg Financial Markets


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