NEWS AND COMMENTARY
November 3, 2000 
Analysts Can't Lower Priceline.com Estimates Fast Enough
By David A. Gaffen, The Street.com
With Analysts Like These, Who Needs Enemies? ... Weiss comments
NEW YORK - The wolves are out and they're gnawing at Priceline.com, which is lying like a wounded animal in the middle of the road.
Goldman Sachs today downgraded Priceline to market perform from market outperform after the company yesterday reported a $2 million loss after the close. That tallies to a loss of 1 cent a share for the third quarter.
The company's highly touted chief financial officer, Heidi Miller, also announced her departure yesterday. And the company is laying off 16% of its workforce.
And then the Monday morning quarterbacking began. Merrill Lynch's Henry Blodget downgraded the stock to a long-term accumulate from buy.
Credit Suisse First Boston cut earnings estimates on the company for the fourth quarter to a 3-cent loss from a 1-cent profit and it cut Priceline.com's 2001 earnings estimate to 3 cents a share from 15 cents. U.S. Bancorp Piper Jaffray lowered its price target on the company to $8 from $12, and increased its loss-per-share estimate to 12 cents from 6 cents for 2000. It also lowered 2001 estimates to earnings of 10 cents a share from 17 cents a share. Despite lowering earnings estimates, both CSFB and U.S. Bancorp expect Priceline to be profitable in 2001.
PaineWebber increased loss estimates for 2000 to 18 cents from 6 cents and moved 2001 earnings estimates to a 6-cent loss from earnings of 22 cents. Robertson Stephens increased 2000 loss estimates to 19 cents a share from 7 cents and it dropped its 2001 estimate to a 7-cent loss from 15 cents.
Priceline was lately off 30.6% to $4.25. Its 52-week high was $104.25.
We don't usually put much stock in the opinions of Wall Street analysts. Most are cheerleaders for any companies that they cover. But when things get bad, like they have for Priceline.com, analysts have a tendency to put down their pompoms and hide in the stands. Heaven forbid they issue a "sell" rating!
We warned you about Priceline from the start. In fact, in our August 1999 issue, when Priceline had fallen 64% in 90 days, Safe Money Report said that it would fall another 50% or more. Today, the stock has done just that, and is now down96% from its 52-week high of $104 to just about $4.
To make matters worse, the future for Priceline looks quite grim. Priceline met earnings estimates that they had recently revised downward -- recording a loss of 1 cent per share. They also announced that they are laying off 87 employees and will take a charge in the fourth quarter that will hurt earnings. On top of this, they admitted that October airline ticket sales had slowed. The company refused to comment on their outlook for 2001, but we can bet that it's not going to get much better. At $4 a share, it's hard to believe that the stock will fall much lower, but there isn't any reason why it would go up, either. The sad fact is that Priceline won't be cheap at any price.
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