Amazon.com, Inc. (AMZN) Message Board

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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 220.66

+1.6%

Nov 21 9:30 AM EST

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To: 16yearcycle who wrote (102169)	4/27/2000 7:53:00 AM
From: Paul Merriwether	Read Replies (1) of 164684

<< Tell me a company that has something "supporting" it's price. That would be a good place to start. How about KO? Berkshire? If you are looking for companies selling below book, isn't their book value dependent on arbitrary values placed on items by human beings? How do we arrive at the appropriate value of anything? >> I will let BO answer your post in detail. IMO the way to assess the value of a company is to look at the future earnings and discounting them based on the interest rate. The investor assumes that the company will disburse that money using dividends or a stock buyback(preferred for its tax efficiency). There are some companies with wads of cash(MSFT for example) that can finance a major stockbuyback to reduce eps(and float). Others, such as GMST are doing just that. AMZN is in _no_ danger of financing a buyback(/dividends) now or in the forseeable future(10 years?). Even if they play some creative accounting games to show "operational profits" in a subsegment of their business, the reality is that their debt servicing would hamper their profitability. Furthermore, their _extremely_ large potential float would keep their eps low. At this point, imho, AMZN is fully priced. -PWM ps: No positions in AMZN at this time(waiting for the numbers and the open).

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