The value drivers of US internet retailers

Abstract

This study empirically explores the role of web traffic in explaining the stock prices of e-tailers. In particular, we hypothesize that the actual buy rate is a key value driver of Internet retailers because it represents the direct performance of these firms in the electronic market place. Our empirical analysis indicates that the buy rate is strongly related to the market value of e-tailers in a positive way after controlling for the roles of such financial valuation measures as net income, revenue, sales and marketing expenses, research and development costs, and book value.