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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 231.69+1.7%3:59 PM EST

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To: Michael Young who wrote (73895)8/15/1999 1:04:00 PM
From: Michael Young  Read Replies (2) of 164684
 
>>Leveraged business model: The only justification for incredible Price/Sales ratios of 50 to 100 times sales is leverage. This means that as the company grows, the overall net margin expands. In the ideal internet company, where additional revenue is obtained at no additional cost of goods sold, leverage can justify a price/sales ratio in three digits. But few internet stocks have this kind of leverage. Amazon.com (AMZN) perhaps the best known internet stock, does not have true leverage. In fact, they warned in their last earnings conference call that their losses would be increasing as their revenues continued to rise, and then warned that revenues would rise less rapidly than expected. That isn't the kind of leverage that a lasting internet stock needs>>
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