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

To: Glenn D. Rudolph who wrote (6595)	6/18/1998 3:37:00 PM
From: Jan Crawley	Respond to of 164684

OK and Ty p.s. But I had order all day yesterday and it did not take. I was going with the bit (lower) price?

To: Glenn D. Rudolph who wrote (6595)	6/18/1998 3:41:00 PM
From: gbh	Respond to of 164684

TSC article with many AMZN references. Wrong! Rear Echelon Revelations: Why Some Stocks Only Go Up By James J. Cramer 6/18/98 8:13 AM ET Until you have actually attempted to buy 25,000 shares of Amazon.com (AMZN:Nasdaq) on the fly, you will never understand the critical component of how an over-the-counter stock can explode like a truckload of old TNT rumbling on a bumpy jungle tote road. Before I got into this professional trading stuff, I thought stocks went up because each day smart people painstakingly revalued the worth of a business. Hey, I'll pay x for Amazon, but not 3x because doesn't Barnes & Noble (BKS:NYSE) make 3x as much money now as Amazon will in the year 2007? Or, let's see, if you cut back Amazon's ad spending and you figure they will sell more CDs than Columbia House and Sam Goody do, then wouldn't you pay $7 billion for that company some day? As a thinking individual these rationalizations would make me sick. I know that in the real business world so many things go wrong that these suppositions are ridiculous. None of these valuations can be justified by the stuff called security analysis, at least by anyone with any intellectual rigor, which is something I value in the real world. I know that because it is what I used to be great at before I bought a stock from an OTC desk that they didn't want me to buy. Huh? What did he say? Go read that sentence again. If you are short these stocks, read it again and again. "They didn't want me to buy it." I know, it seems a little counterintuitive. I mean, aren't all of those trading desks set up to accommodate this kind of buying? Isn't that what they want me to do? Aren't they there to provide me with stock to buy? Yes and no. In the case of Amazon, no. These trading desks don't have anywhere to go to get the stock. Nobody has any stock for sale to sell them to sell to you. They can't create the stock, either. They can't borrow the stock from someone else and sell it to you. There are no shares to be borrowed -- although they would certainly be willing to do so if they could find the shares. That's called "shorting" it to the buyer, and these guys are incredibly accomplished at doing that, when they can find stock. Many eons and follicles ago, when I was a broker at Goldman Sachs, I handled some to-be-nameless Microsoft (MSFT:Nasdaq) execs' accounts. Microsoft has been a great big stock for so long that it is probably hard to remember when it was an itty-bitty billion-dollar company, but it was. The OTC desk used to call me constantly to get me to see if anyone had any Microsoft for sale. That's just part of their job. Of course, those owners weren't dumb; they were buyers, too!!! So, believe me, even though Goldman brought Microsoft public, there were plenty of times when you could not find any stock for sale. That's why the market makers offer you a couple of thousand shares and then demand that you pay up for the rest. They keep hoping that you will either say no, that is outrageous, or OK, and let them work on taking the stock higher to see if supply develops. But this is not Econ 101. While they are walking the stock up looking for sellers, they are getting hit by all sides: stealth buyers of the call options, both deep and out of the money, SOES bandits who prey on these situations, large accounts that can't be said no to. And because of Justice Department supervision they can't even talk to each other to figure out whether any of their buddies at other firms have stock. You couldn't pay me all the yen the hedgies are short to do that job. So they ratchet the stock up. And up. And up. Eternally hopeful they will find buyers. And then one day the Financial Times reports that a real buyer -- not a mutual fund, not a short coverer, not a Yahoo (YHOO:Nasdaq), if you excuse the pun -- wants in the game, at a premium. AT&T (T:NYSE). Not sausage-casing king Zapata (ZAP:AMEX), but Ma Bell. Talking north of $120 for America Online (AOL:NYSE). Now, not only is it impossible to find the stock, it is lethal to sell it. And the OTC guys want to crawl into their caves and shells and pray that you don't ask for some Amazon. At any price. That's how stocks go higher in these here United States.