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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 241.56+0.3%Jan 7 3:59 PM EST
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To: OtherChap who wrote (14524)8/24/1998 8:25:00 PM
From: Bill Harmond  Read Replies (2) of 164684
 
>>1) Will amazon keep going up forever? is there any market capitalization that is too high? what if it had todays sales and losses, but it were trading at a market cap of 100 billion. would you say that is too high?

OC, nothing is forever. You know that, and the rest of this question is extreme. Cisco has a $100 billion market cap. Is Amazon worth as much as Cisco today? What do you think? Of course not.

2) Do you admit that vink (or whoever) is squeezing the shorts? or do you think the stock price got to this lofty level all on its own without manipulation?

Forget Vinik and conspiracy theories. The thought may make you feel better, but Amazon didn't appreciate 1,000% in the past 12 months because of a short squeeze; it rose because of institutional accumulation. Over time short squeezes are zero-sum anyway, because the shares involved had to have been sold first, so for every short squeeze there's at least as much selling earlier.

So, What is Amazon worth? It's worth what the market is willing to pay on any given day. Using discounted cash flow analysis or more conventional yardsticks to determine fair value for these shares is an exercise in futility, because so little is known about what Amazon will eventually be.

Amazon is open-ended. How did the pioneers know they were halfway to California when there was no Denver? Commercializing the Internet is like settling the West. There is no map. No one has a clue what the dimensions are, only that it is big and wide open.

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