Neither of your conclusions follow.
Where'd you get the idea that I was drawing any conclusions? I was responding to the following statement from you:
As long as people are willing to wait three years, this thing is fine.
Let me rephrase. You imply that you think, in about 3 years, the fundamentals will catch up to today's valuation. If this in fact happens, that is in 3 years they have the revenues and profits to justify a $1.5 bn valuation, and assuming away any risk of this coming to be, then one of the following should be true: 1) Those holding the stock today in the $60s -oops- $59, will have a stock three years from now trading at >50 times ttm earnings and they will have recieved no return on their money for 3 years; or 2) In 3 years, it will be trading at some high multiple of 2003 earnings projections and perhaps 100 times 2000 earnings, resulting in a price then that is high enough for today's investors to get a decent retun on their money. If I misunderstood you, then just what was your point? That shorting can be painful? If you mean going forward, why? Just because it has been?
As for AOL, though based on the charges they have taken in '95 and '97 one could agrue that they have never made money, in four out of the last six years they have booked a profit. They also had $1.6 billion in revenue in 1997. I wouldn't buy AOL either, but the similarities end there.
One last question: If AMZN is "close", but "not there yet", then just what is the point where you would consider shorting it?
Bob |
