Sir, and to ALL: what does " Effectively unlimited scalability" mean as used below, where he implies internet stocks can grow immensely because of this? Can you explain this in layman's terms? Thanks.
And how high can AMZN go?\jhg
Amazon.Com Inc.
Dow Jones Newswires -- January 7, 1999
Web Stocks Up; Investors Take In Bullish Predictions For 99
NEW YORK (Dow Jones)--A number of big Internet stocks are hitting new highs Thursday
But Web shares appear to be climbing for a second day after Steve Harmon, senior investment analyst for the Internet.com Web site issued his sector outlook for 1999. Internet.com is a Web site that follows the Internet industry and publishes the ISDEX Web stock index, which has gained a following among Internet stock investors in Silicon Valley and on Wall Street.
"As long as the industry continues to permeate every aspect of consumer and commercial life, Wall Street should reflect that robust growth," Harmon said in the report released Wednesday that details his predictions for 1999.
Harmon said 1998 was "the year that Internet stocks became household words - taxi drivers spit out ticker symbols and discussed online trading."
And as this enthusiasm pushed up Web shares through most of last year, analysts struggled to make sense of stock prices and "old line money managers on Wall Street scoffed at valuations," Harmon said.
As a result, he believes, some Internet stocks are overvalued and a correction is probably "on tap soon." But Harmon stressed that "bubbles burst and bubbles come back. The constant has been industry growth."
As for the industry fundamentals in 1999, Harmon said he sees business opportunities in email management, targeted marketing and advertising, and smarter electronic commerce.
The analyst also sees consolidation ahead - a theme echoed by many analysts. But while most expect traditional media companies to acquire Internet media companies, Harmon believes the opposite could happen.
"Effectively unlimited scalability" and high stock valuations among the Internet companies will make this possible, he said.
In active trading Thursday, shares of Yahoo! Inc. (YHOO) hit a new high of 325 3/4 earlier, passing a high of 299 set Wednesday. The shares were recently up 29, or 10%, at 320.
Shares of Amazon.com Inc. (AMZN) hit their third 52-week high in as many trading days, after the company split its stock 3-for-1 Tuesday and said its fourth quarter sales will come in at about $250 million, above analysts' estimates. The shares climbed as high as 160 earlier, and were recently up 19 1/2, or 14.1%, at 157 1/2.
Shares of Lycos Inc. (LCOS) hit a new high of 75 1/4 earlier and were recently up 7, or 10.6%, at 73.
eBay Inc. (EBAY) hit a new high of 315 earlier, and was recently up 23, or 8.1%, at 306.
Shares of America Online Inc. (AOL) were up 5/8, or 0.5%, at 149 5/8.
Synergy Brands, Inc. (SYBR) shares were up 11/16, or 31.4%, at 2 7/8 after the company announced it entered into an agreement with VisuaLink Technologies, Inc. for development of BeautyBuys.com, an e-commerce website.
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