Seeking Alpha

Morgan Stanley cuts Internet sector view to In-Line, cites valuations

  • With many Internet names having seen giant 2013 gains that have led P/E and P/S ratios to rise to eye-opening levels, Morgan Stanley is cutting its view of the sector to In-Line from Attractive, even though it thinks industry trends remain healthy.
  • Google (GOOG) has been pulled from MS' Best Ideas list. The Web giant's shares are up 44% YTD, but their multiples remain subdued compared with those of some peers: Google currently trades at 16x 2014E EPS after backing out net cash/investments. Shares -0.5% premarket.
  • Facebook (FB) -1.3%. Top VC firm Andreessen Horowitz has disclosed the sale of roughly 1/3 of its Facebook stake (2.28M shares).
  • The sector has already corrected a bit; shares sold off hard on Thursday as Twitter made its much-hyped debut.
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