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

To: Karl Radke who wrote (720)	11/9/1997 3:06:00 AM
From: Ted Levy	Read Replies (1) \| Respond to of 164685

Excerpt from this weekend's Barron's re: Amazon.com: Q: Paul, do you own any Internet stocks? Wick: Actually, I think everything in this space would make my list of pans. The whole sector is outrageously overvalued. It's a shocking example of speculation gone overboard. In many instances, the barriers to entry are completely nonexistent. Some companies appear to have a reasonable, sustainable business model -- I think Yahoo! is actually an okay business. On the other hand, at 25 times what Wall Street is expecting for 1998 revenues, the valuation is insane. Q: A little pricey, anyway. Wick: My favorite negative one would be Amazon.com. It has a $1.4 billion market cap on a $280 million sales forecast for 1998. The company won't break even until 1999 at best. And yet you look at Barnes & Noble, which has a $1.8 billion market cap, doing sales of $2.8 billion, and making a profit, with what I think is a more sustainable franchise. Barnes & Noble has the superstore concept, a proven, viable concept. You can't get coffee and donuts online from Amazon. Q: But Wall Street seems to think Amazon has a good business model. Wick: The books business has lousy demographics. Americans are reading fewer books every year. It's like the trend in newspaper readership. The business has terribly low profit margins. And I don't see what's so great about the business model.