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Technology Stocks : Dell Technologies Inc.

DELL 130.49

+0.4%

3:59 PM EST

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To: Meathead who wrote (129987)	5/31/1999 11:56:00 AM
From: Chuzzlewit	Read Replies (2) of 176387

Meathead, a couple of additional points. I think that there are many who wrongheadedly assume that at some point AMZN will become profitable, and will become the Walmart of cyberspace. But even assuming that this possibility comes to pass, the economy is simply not large enough to support the kinds of valuations AMZN currently enjoys. I calculated that AMZN would require a free cash flow (or dividends) of between $12 - $15 BB to maintain its current valuation. At a very generous 10% net profit margin, and an equally generous 50% dividend pay-out ratio it is clear that the company would need to generate sales of between $240 and $300 BB per annum. I would like somebody to tell me how this is possible. That's why I think that e-tailing is a huge stock market bubble, and there will come a point when the entire sector will crash. At this point I don't see paying more than around $3 per share for AMZN. TTFN, CTC

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