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Strategies & Market Trends : Value Investing

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To: Michael Burry who wrote (5764)	1/13/1999 3:36:00 PM
From: Jurgis Bekepuris	Read Replies (1) of 78639

Mike, >Amazon.com... could do 10 $1 billion dollar stock > acquisitions of real companies that needed to earn their >way to $1 billion market cap, and AMZN stock would hardly > suffer. It would not suffer from dilution. It would suffer from unpredictable changes of investor psychology. I.e. investors seeing AMZN buy a "slow grower" would decide that the 100% growth days are over and it's time to bail. The stock would crash in a day. Of course they could buy another bubble stock but such purchase would not improve their situation. >If Amazon started to do that, or did a second offering at > these prices, I'd have to cover. Secondaries are also dangerous to bubble stocks. They increase the float and raise uncomfortable questions about capital use. See my discussion with Paul on IOM's secondary. Good luck Jurgis

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