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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 232.50+0.1%Dec 26 3:59 PM EST

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To: Bill Harmond who wrote (120066)3/11/2001 1:30:25 PM
From: Kevin Podsiadlik  Read Replies (1) of 164684
 
EBIDTA is a very common and accepted benchmark. Has been for many years.

True as far as that goes, but it is also a very abusable benchmark, inasmuch as novice investors can be misled into thinking the items being excluded are unimportant.

The problem is that the figure is only really useful on a relative basis (comparing quarterly or yearly results to illustrate growth). The notion of having "positive EBIDTA earnings", while nice-looking on a press release, is not really meaningful. Doubtless many of the dot-coms that have failed over the past several months were "EBIDTA positive" right up until the end, when the "I" shut them down.
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