Amazon.com, Inc. (AMZN) Message Board

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

AMZN 232.44

+1.4%

12:06 PM EST

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To: tonyt who wrote (29939)	12/16/1998 10:38:00 AM
From: Rob S.	Read Replies (3) of 164684

If you are betting on this stock to go down because of fundamentals, then you need a reality check. The stock price is governed by supply and demand and the spectacular growth of e-commerce. Bio tech stocks haven't been judged by anything as meaningless as fundamentals because they hold the promise of great sales and earnings streams several years out. The Internet stocks are looked at much in the same way. Then you add in the Internet stock trading factor and social involvement with the Internet and you get the explosive upside potential we have witnessed. Then you cap that off with the equally impressive amount of short-selling of the stock and options and you get a phenominal, never before witnessed potential for explosions to the upside. Fundamentals won't come into the picture until growth slows and the theory that you can trade off market share now with losses proves to be at least less than the stock price can tolerate. You can talk about fundamentals: Earnings forecasts call for something like $2-$4 in earnings in the year 2003 (5 years out). Then say - "If Amazon does the $4 number, that means that the stock is now trading at over 70 times 5 year out earnings. At Op's $400 target you get a P/E of around 100. If you look at price to sales ratios, and correctly compare them to other companies in the retail sector rather than to higher gross margin companies such as Yahoo!, that too looks "totally unbelievable". But what difference does this make as long as: A] More and more people are jumping on the Internet bandwagon? B] Brokerages are making 100s of millions of $ per day in trading commissions in the sector. C] Short exposure is at unprecedented levels. D] Fundamental risk logic doesn't apply? This is again options expiration week an the short squeeze is again driving up the stocks. The brokerages love it. The insiders love it. As short sellers are running for cover. You can be so right and still be so wrong.

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