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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 249.14+0.3%3:59 PM EST
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To: Glenn D. Rudolph who wrote (10682)7/17/1998 12:59:00 PM
From: Rob S.  Read Replies (3) of 164684
 
I se it as inevitable for Amazon to build their own infra-structure. Past maybe $100 million in sales, it becomes too expensive to grow the business on the sell-through model they started out with. That has also been the case with OnSale.com and other inet commerce companies. I think that Amazon will draw down their cash reserves within a year to the point that they will need to go out with a secondary offering or secure more costly (10% + stock options) debt. The company will need time to plan and secure this financing so they will likely go out for it within the next six to 9 months. With all the money to be made by the Wall Street investment banks, the stock offering may well be promoted fiercely to a higher price relative to where it is at the time. That might well be the "deal of the century" for those wanting to short.

The realization of the dramatic effects that the internet is and will have on the world economy is still growing and that is fuel to inflate the internet sector stocks. I think that the current wave of this effect has not played out and that many more will roll through the markets over the next few years. The inet stocks are likley to continue to see periods of hyper valuation, IMO. Amazon.com and several others are at precipitously high valuations. I consider some of the business models and assumptions of these companies are seriously flawed and motivated by the parties that will benefit most - the venture capitalists and large stockholders. Once some of the glimmer wears thin, Amazon will come down.
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