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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: H James Morris who wrote (143802)	7/16/2002 11:50:46 AM
From: Oeconomicus	Read Replies (2) \| Respond to of 164684

Nextel up? Maybe someone concluded they don't cook their books. So, they've got $3B in EBITDA, $13.4B of debt, $1.8B of preferred and a $5.3B market cap of common. EV/EBITDA is 6.8x. Interesting, but we're missing another variable - what is the maintenance level of CAPEX (the level required to maintain revenues & cash flows at current levels)? Don't know? OK, what's total CAPEX for the coming year? Last year? You can't value an equity based on EBITDA without knowing the amounts of debt and required CAPEX. However, you can compare enterprise value/EBITDA multiples of companies in the same or similar business. In fact, if they have significantly different capital structures or you are considering a buyout of one of them, that's the comparison you need to make. It's not EBITDA that should be "under fire", but rather the people misusing it. Regards.