Discussion of "The Internet downturn: Finding valuation factors in Spring 2000"

This article reviews 'The Internet downturn: Finding valuation factors in Spring 2000' by Keating, Lys, and Magee (KLM). Their paper contributes to a growing literature on the valuation of Internet firms, finding strong relations among market prices, accounting variables, and assorted 'new economy' measures of performance. I argue that their results tell us more about investors' (mis-)perceptions in Spring 2000 than about the underlying economics of Internet firms. Moreover, the valuations seem unlikely to repeat. KLM's findings may not generalize to other firms or time periods. (C) 2002 Elsevier Science B.V. All rights reserved.