At 99 AMZN market cap is over 2.4 billion.....today, BKS market cap is 2.6 billion with 2.7 billion in sales and several hundred million in profits. By contrast AMZN has 147 million in sales and expected to LOSE $1.28 per share in 1998..........
So effectively these 2 companies are selling for equal value, and BKS was just made a Fortune 500 company, recognized for ranking 8th last year for return on investment.
SO WHAT THE HELL IS GOING ON YOU SAY???!!!!
Bear with me. For starters, there are very few internet analysts out there on the street. They are much in demand. Many of them are switching companies every 6 months, because huge salaries and bonuses are being thrown at them...the rest are finding their way into new firms through mergers...that is why there is some new firm starting coverage of the internet sector virtually everyday. They acquire an analyst who just repeats what he/she said at the last place he/she worked and attaches the new letterhead to it. Makes it look like the whole street is bullish the internet, no? Another reason why these analysts are in demand is that the investment houses all want to be the next ones to bring public the next internet company. Therefore the analysts MUST remain rosey on the industry...It's just about 20 people, thats it. Their opinions are being repeated ad infinitum at each firm they hop to. That is why Merrill just started coverage today, they bought an internet analyst.
Now that you understand that,
What you are witnessing is an orchestrated Wall Street move in internet stocks run by hedge funds and traders...there are virtually no individual investors in these stocks....the floats are tiny, the hedge funds and daytraders buy everyday and the market makers put up the bids on the back of the Investment house strong buy recommendations.......no regulators give a damn because everyone is making money...it is a pyramid game...and at some point someone will lose a lot of money. Then you will see the lawsuits the SEC and Nasdaq trying to cover their butts by investigating the process by which these companies were brought public and how the markets were made.....
Do you really believe that a company can be brought public by a Wall street top investment bank and be underpriced by 10 or 20 fold? That, if you believe today's prices, is what every internet stock that has ever been brought public has had happen to them...they are all 10 to 20 times higher than the 52 week lows where they were brought public.....geez...how could the I-banks make the same mistake 50 times????????? These stocks are barely worth the IPO prices and at 20 times that they are pure speculative mania, yadda yadda yadda you've heard all that already.....I think you will be seeing people going to jail in a couple of years much like the Junk bond kings all did in the Michael Milken era for manipulating those markets....it is the same thing, just a diferrent medium .....good luck to you......;^) |
