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Technology Stocks : BAMM - BOOKs A Million (BAMM) .. the next Amazon.com ????
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To: T-Lo Greens who wrote (498)12/13/1998 8:28:00 PM
From: Rajiv  Read Replies (1) of 1196
 
AMZN insiders still own around 60% of all outstanding shares. The institutions control around 30%. AMZN is considered a first tier internet stock - this means that if an institution wants to invest in the internet sector, they are more likely to invest in AOL, YHOO, AMZN, etc. Sure AMZN is overvalued but the additions to supply (insider sales) are being easily absorbed by very strong institutional and retail demand. The rules of demand and supply are driving AMZN's share price.

BAMM is at best a third tier internet stock. It is a "pure" bookseller and selling books will be very competitive with razor-thin margins. BAMM insiders control less than 25% of the outstanding shares. I would be really surprised if the institutional holdings were not dumped during the recent runup. The supply of BAMM shares is clearly more than the demand.

It costs lot of serious $$$ to enter the e-commerce field and be successful. It might not cost much to put up a website and sell stuff via the internet but you cannot expect people to stumble onto your website. Are you aware how much BKS pays AOL for a link from AOL? Can BAMM afford it? I don't think so. I am fairly certain that the % of revenue coming from internet sales (for BAMM) will never be more than 10% - It is more likely to be less than 5%.

The momentum players have left BAMM - people holding a long position in any ex-momentum stock will pass through a very painful period.

Regards.
Rajiv
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