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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 231.88-0.3%10:20 AM EST
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To: wildbill who wrote (27737)11/22/1998 10:26:00 PM
From: Rob S.  Read Replies (1) of 164684
 
I both think it is a frenzy and Amazon is bid up to unrealistic levels but also think that the Internet is a huge economic force that will reshape about 33% of commerce within the next decade (several studies agree with this). So there is some real steak to go along with the sizzle, much like there was with the bio-techs in the early stages. What speculators miss is how much of the early "adoption phase" of the internet that we are in, how easy it is to compete and how many competitors are just now starting to mount efforts that pose any threat to Amazon. Amazon.com will bump along just great for a few more months before competition has significant effect. The expectation among investors is that Amazon will grow to a huge company with huge profits to go along with it. The reality is that they are sinking further into losses and that competition is already getting tougher such that profits will be similar, at best, compared to mass merchandise retailers (1.2%). What matters to the stock price now is how many new dollars are being thrown at the sector and Amazon in particular. That doesn't depend so much on any rational projection of profits/risk or other fundamentals. Any small piece of negative news can upset Amazon at this point while "all the good news" is already factored into the stock.
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