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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 228.44

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To: Glenn D. Rudolph who wrote (6853)	6/20/1998 12:58:00 PM
From: marion (Hijacked)	Read Replies (1) of 164684

Glenn, I made this post on the Yahoo thread about the CNet deal: The fact that the CNet deal is what ignited this latest round of Internet mania is quite strange. No one sought out CNet. CNet was actively seeking investors. They were in need of cash. This company lives off secondaries and private placements. In their December 31, 97 10K they mention that they were not in compliance with their lenders, but had received a waiver from them. I read several times how CNet was seeking a buyer or an investor for SNAP. All we have here is a "private placement" where NBC agrees to buy stock for around 33 dollars a share and this sends their stock to the mid fifties and fuels the other net stocks. It's ironic, but I think the fact that so many of the net companies are not generating much revenue and are in such desperate need of cash all the time is in part why their stock prices are so high. The investment bankers ( who are the analysts) are the ones going out to get this money. Of course they will have strong buys and glowing reports. The investment bankers will make huge commissions of the sales of the junk bonds, private placements, and secondaries. The more they lose, the more money they need, the more the analysts will pound the table. Yahoo doesn't generate the type of revenue needed to pay for the type of expansion they are planning. They will need to get cash. Enter investment banker. And since normal valuations can't explain the ridiculous market caps they can just make up new ones. Forget earnings, forget revenue. Hey look at the number of hits, look at the eyeballs. The fact that they can't equate some of these numbers with dollars doesn't seem to bother anyone. They might as well be judging these companies based on the number of cars in their parking lot. Who knows, maybe that's what they will do since the number of hits isn't increasing. Marion

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