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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 239.16+2.1%Jan 23 9:30 AM EST
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To: Oeconomicus who wrote (5705)6/12/1998 6:24:00 AM
From: Alexander Pavlov  Read Replies (2) of 164684
 
<< $200 million + increase in mkt cap in last two days is short covering. I think not.

And, if you are going to try to convince us this wasn't short covering, at least get your numbers right. The increase in market cap the last two days alone was over $500 million.>>

Bob,

That $200+ mil increase Victor mentioned is not in mkt cap. It is 2 day's unrealized gain of Mr Bezos on his approx 20 mil shares. Probably they both are trying to figure how to realize that gain. Hehe, nice to know that longs have headaches as well :o)

But seriously, what $500 million increase in mkt cap you are talking about? The float is 6 mil out of 49.5 shares outstanding. Two days increase was 11.25. That gives 11.25 x 6 = 67.5 mil. If we consider mkt cap as a market valuation of the company, i.e. price market is willing to pay for the company, then all I can see is just 67.5 mil increase in this valuation. Being distributed among 49.5 mil shares these $67.5 mil would produce only 1.36 pt rise. To put it in another words, nobody will pay Mr Bezos $200 mil more than as of mkt close Tuesday for his shares. This is the way small float works.

Reminds me about KTEL - it happens you do not believe your eyes watching the tape, but in the long run price and value are to converge.

"And so castles made of sand fall in the sea, eventually."

Alex
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