\magnification=1200
\baselineskip=20pt
\nopagenumbers
\font\big=cmr12 scaled \magstep2

\centerline{\bf STANFORD UNIVERSITY}
\centerline{\bf DEPARTMENT OF STATISTICS}
\centerline{\big DEPARTMENTAL SEMINAR}
\bigskip

\baselineskip=12pt
\centerline{4:15 p.m., Tuesday, July 24, 2001}
\centerline{Sequoia Hall Rm. 200}
\centerline{(Cookies at 3:45 in 1st Floor Lounge)}

\bigskip
\baselineskip=15pt
\centerline{\sl S. C. Kou}
\centerline{\sl Department of Statistics}
\centerline{\sl Stanford University}
\bigskip
\centerline{\bf A Stochastic Model for Internet Stocks}
\bigskip

In the traditional financial asset pricing methods, a fundamental
ingredient is earnings or projected earnings. For growth stocks, particularly
internet and biotech stocks, however, the traditional methods are not very
applicable, since the stocks can have hardly any earnings for years.
In this talk, we propose a new valuation model, which does not involve
earnings. The model, in particular, explains some empirically observed
puzzles for growth stocks. In addion to the empirical results, numerical
results will also be discussed.

This work is joint with Steven Kou.

\bye