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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 239.50+0.1%11:36 AM EST
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To: Sarmad Y. Hermiz who wrote (65865)7/1/1999 12:14:00 PM
From: Eric Wells  Read Replies (1) of 164684
 
I agree that there is a risk - and I realize that there is always a chance that the stock may drop to 80. But I like AOL for the following reasons:

1. It is profitable - very profitable compared with other portals (save Microsoft). It also has about $2.5 billion in cash, with very little debt.

2. I think the E-Machines deal will boost revenues and profits.

3. AOL was on Lehman's top 10 valuation company list released yesterday.

4. Mary Meeker likes the stock - she likes it the most of all internet stocks.

5. AOL's stock price is low compared to it's all time high in April of approx. 170 - it has yet to rebound as YHOO has (and as AMZN is apparently making an effort to do). I realize this is a weak argument for a movement upward - but it seems to work for other stocks.

6. Hopefully AOL's large float will limit it's volatility - should the stock begin to decline, I will have time to get out before I lose my shirt (I cannot say the same for other internet stocks).

As a negative, AOL's PE ratio of 220 is cause for concern (considering the size of the company) - buy hey, it is lower than YHOO's at 1800, EBAY's at 2300 and AMZN's at infinity. But with all the positive news around the company at the moment, I think AOL will go up. Of course, I will watch the stock cautiously and lock in my gains should there be any hint of a free fall.

Thanks,
-Eric Wells
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