Internet Stock Valuation: The Impact of Relational Value on Market Value of Equity (Manuscripts‪)‬

ABSTRACT This study focuses on the impact of accounting and nonfinancial information on the valuation of internet-related stocks during the years 1996-1999, at the inception of the internet industry. Only nonfinancial information is found to be consistently positively related to the market value of equity of internet companies, using both traditional and Ohlson residual income valuation approaches over this time period. The unaudited nonfinancial information, including number of customers, used in this study was self-identified by the internet firms for voluntary disclosure in their annual reports, and this type of nonfinancial information has not previously been studied in the context of the internet industry.