This study looks at the value-relevance of accounting data and measures of web-traffic for Internet firms listed on the Neuer Markt. We show that earnings and cash flows cannot explain the valuation of Internet companies, while we report a positive association between total sales and market capitalisation. In addition, sales and marketing as well as research and development expenses are relevant value-drivers. Furthermore, we find a positive relation between market values and a number of web-metrics such as customer loyalty, reach, page impressions, and unique visitors. We conclude that during the Internet bubble, measures of web-traffic provided at least as much explanatory power for market values as financial statement information.
Trautwein, A. and Vorstius, S. (2004), "THE ROLE OF ACCOUNTING DATA AND WEB-TRAFFIC IN THE PRICING OF GERMAN INTERNET STOCKS", Giudici, G. and Roosenboom, P. (Ed.) The Rise and Fall of Europe's New Stock Markets (Advances in Financial Economics, Vol. 10), Emerald Group Publishing Limited, Bingley, pp. 157-180. https://doi.org/10.1016/S1569-3732(04)10007-8
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