Amazon.com, Inc. (AMZN) Message Board

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

AMZN 226.95

-1.4%

3:07 PM EST

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To: McNabb Brothers who wrote (14275)	8/21/1998 7:20:00 PM
From: Rob S.	Read Replies (3) of 164684

I have been thinking AMZN would sell-off after options expiration but not by very much. It seems that each time a lot of hype gets stirred up because of IPOs or acquisitions in the sector that Amazon attracts either short covering, more speculators or both. The effect of increased competition SHOULD BE NEGATIVE to rational investors because it is counter to the fantasy that Amazon is worth the astronomical price. But reason isn't what is driving AMZN but the basic supply and demand for the stock. So as awareness gets increased due to the BKS IPO, AMZN may be positively effected enough to counter some of the increased liquidity. To try to answer your question: I think that the stock should move down due to the release of some shares post options expiration but have a more difficult time reading the reaction to the BKS IPO. The balloon will probably stay filled with hot air until either the market pull-back deepens to the point that the so-far un-effected inet sector finally sells off or until the picture dims as sales slacken and get spread out over a greater number of competitors. The latter will not happen quickly but rather over the next several quarters. I can't tell when the bubble will finally burst but my guess that it will survive fairly in tact until the second quarter of next year. When the market finally rebounds - I think more blooshed is likely although we may get a temporary rebound by the end of next week. This depends a bit on how the spin on the news and public sentiment works out this weekend. If the mood remains gloomy I think increasing numbers of investors who have been "riding it out" will decide to cover their exposure and will sell. I'd like to see the DOW drop about 1,200 points over the next few months with the blue chips taking the brunt of the pounding - then the psychology might be right for a sustained recovery. Otherwise, with present skews in asset allocations between the blue chip & darlings and the mid-small cap stocks there is too much inefficiency in the allocation of wealth with too much money powering the hands of relatively less productive companies. It may get so ugly within the next year that Senators (like in a recent WSJ article) call for Greenspan to increase liquidity greatly in order to ease worldwide monetary liquidity problems. Greenspan is smart enough to see that the problem is not (or not just) liquidity and currency valuation related. He pointed out that it is the demand v. supply situation for goods and services that poises the greatest problem. He is probably way too conservative about liquidity but he's right, freeing it up won't help the underlying problem that much and may just delay the outcome and make it to grow greater. The daxn international muttonhead bankers who wined and dined their companies into massive debt should be allowed to reap the rewards for their efforts - like billions in losses and maybe even bankruptcies. Sorry for going on, but the economy is starting to over-ride stock decisions.

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