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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 232.38+0.1%Dec 24 12:59 PM EST
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To: Steve Yuan who wrote (31933)12/31/1998 9:33:00 AM
From: CMon  Read Replies (1) of 164684
 
Steve:

So how do you get from your argument to this valuation?

In any event, all the products you mentioned are commodities. If AMZN becomes the dominant seller of all of them, they'll still do it at a tiny margin. They didn't write Hamlet.

A business that operates at a small margin is worth a fraction of its revenue. Period. At its $18 billion market cap, AMZN better have $60 billion of revenue next year. If you're a wild optimist and say they'll do $1 billion next year, they're only 60x overvalued. You think they'll do $60 billion in five years? 1) You're crazy. 2) If so, you better discount this valuation back at, say 20%?, and they're still wildly overvalued.
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