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

To: Tom D who wrote (1809)	2/28/1998 12:42:00 PM
From: William T. Katz	Read Replies (2) \| Respond to of 164684

Tom, I agree that this stock is very interesting because we have reasoned opinions on both sides of the argument. I'm definitely short because of the many reasons cited before but I can understand why some longs feel AMZN's focus, cash position, and internet growth make it a good buy. Yet I find, even among the bulls, not many who would step up and buy this stock at $80. I can understand why those sitting on large capital gains might want to stick this out 18 months with the risk that the bubble might burst. The key thing in my mind, though, is that the explosive growth is already built in to this stock price. Everyone expects $1 billion in revenue by 2000-2001, despite all the other big names throwing their hat into the ring. And amazingly, the current price, by many measures, already assumes a $1 billion revenue .. and I'm not talking about P/E, more like P/S. There are definitely some certainties ahead: internet growth, more online selling, more online competitors, and definitely price reductions on books. As the revenue grows, I'm sure the states will make sure they get their tax. Many people describing the Internet Tax laws up for debate are mistaken that the law will prevent local sales taxes. The law just says you can't tax internet more than purchases made at a local retail store = status quo. Eventually this float will increase. Eventually AMZN will have to be judged as a maturing business and not an explosive start-up. I just see limited upside and larger downside because a great future is already built in to the stock price. And with momentum stocks (like Netscape), when the bubble bursts it is very pronounced. I agree AMZN is a good company. They have a fine web site. And I may buy some popular book from them sometime if they have the lowest price. But they are really excessively valued for a name and a web site. Yahoo is actually a worse short in my mind because they could be transforming themselves much more radically. AMZN is an online merchandise seller in commodity areas. -Bill