Does anybody really believe that name-your-price travel agent Priceline.com is worth $23 billion? The momentum surrounding the stock continued on Friday as shares of Priceline.com soared 24-9/16 to 162-3/8, giving it a market capitalization of $23.1 billion. Keep in mind that this is a stock that went public at $16 on March 29 and was trading as low as $58 just a couple weeks ago.
Priceline.com ended the quiet period after its IPO by announcing numerous figures that illustrated its growth on Monday. But $23 billion? That means Priceline.com is worth more twice as much as American Airlines, which is actually booking more travel online than Priceline.com, not to mention all the travel booked offline and the fact that American Airlines actually owns planes.
Wednesday was the first day Priceline.com had ever sold a million dollars worth of leisure airline tickets. Meanwhile, American Airlines announced last week that it is forecasting gross sales of $500 million at its Web site in 1999 and that the company has booked as much as $1.7 million in travel on a single day. Priceline.com looks like a stock that has run up too far and too fast. If you want to play the online travel sector, you might want to a look at Preview Travel (Nasdaq: PTVL) instead.