V: We would have made a BOATLOAD of money shorting Amazon -- the Titanic of Net Stocks!!....
Here's the latest update....
Friday June 23, 3:25 pm Eastern Time
Web star Amazon plunges on analysts' warnings
By Ian Simpson
<<NEW YORK, June 23 (Reuters) - Shares in top Internet retailer Amazon.com Inc. (NasdaqNM:AMZN - news) plunged 20 percent on Friday as analysts questioned the money-losing company's credit-worthiness and revenue growth.
The yellow flags about Amazon.com, the biggest name among companies that sell to consumers over the Internet, helped fuel jitters about the sector overall. Web retailers are already battling fears of cash shortages as interest rates rise.
Wall Street's worry about Seattle-based Amazon.com ``doesn't bode well for the rest of the sector,'' said Kristine Koerber, an analyst with W.R. Hambrecht and Co. in San Francisco.
Amazon.com, which has expanded from its book-selling roots into such areas as groceries and kitchenware, tumbled 9 points to 33 in mid-afternoon. The stock hit an 18-month low and was off almost 70 percent from its closing high in December.
Underscoring investors' jitters, volume was more than eight times normal daily levels in overall light summertime trade.
Amazon.com weighed down Internet shares overall. The American Stock Exchange's Internet index (^IIX - news) fell 2.6 percent.
Investors' anxiety was refocused by downbeat comments from Morgan Stanley's Mary Meeker, one of Wall Street's most influential Internet analysts, and Lehman Brothers credit analyst Navi Suria.
Meeker said, in a note released by Morgan Stanley, that Amazon.com's third- and fourth-quarter revenues likely would not top her estimates ``and there could be some modest downside.''
She added that the fourth quarter, including the crucial holiday shopping season, would be ``make or break'' for the company. Her outlook for operating losses stayed intact.
Although revenue growth in coming quarters would be strong compared with the year before, ``the issue is the sequential rates of growth in the June and September quarters,'' Meeker said.
In a strongly worded note, Lehman Brothers' Suria called Amazon.com's credit ``extremely weak and deteriorating.''
He added, ``We believe that the combination of negative cash flow, poor working capital management, and high debt load in a hyper-competitive environment will put the company under extremely high risk.''
Suria noted that from 1997 to the latest quarter Amazon.com had received $2.8 billion in funding and netted revenues of $2.9 billion.
That's ``a whopping $0.95 for every dollar of merchandise sold,'' he said.
David Kugler, president of Monument Funds Group in Bethesda, Md., which focuses on Internet investments, said the comments would put Amazon.com and other Internet retailers under ever-closer scrutiny.
``We don't see Amazon.com going out of business, but clearly they have to deliver,'' he said.>> |
