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

To: slipnsip who wrote (7559)	6/25/1998 11:57:00 AM
From: H James Morris	Respond to of 164684

by Alex Fryer Seattle Times business reporter Amazon.com shares caught an updraft of market forces to hit an all-time high of $99.813 yesterday, a jump of 7.7 percent for the day and a 133 percent gain since the start of the month. While the Seattle-based Internet bookseller has yet to make a profit, the latest stock spike proves that earnings and revenue play only a partial role in a company's fortunes. The recent run-up gained speed June 11 when Amazon.com began offering music CDs on its Web site. The move was applauded by analysts, and the stock took off. Analysts say that caught some short sellers by surprise. Short sellers, gambling that a stock will fall, sell borrowed shares in the hope of buying them back at a lower price and profiting from the difference. When Amazon.com stock began to gain momentum, some speculators were forced to buy back the shares at higher-than-expected prices to stem their losses. Other factors also came into play. Last week, Walt Disney Co. agreed to purchase Infoseek, an online search directory, and investors rushed to find the next Web-related acquisition, sending Amazon.com stock even higher. There was more good news Tuesday: The U.S. House passed legislation preventing new state or local taxes on most Internet business. And an appeals-court decision in favor of Microsoft in its battle with the Justice Department helped fuel other high-tech stocks. The result: Amazon.com has a market capitalization of $4.9 billion, more than twice that of rival Barnes & Noble. In the first quarter of 1998, Amazon.com reported sales of $87.4 million, more than five times the year-earlier figure. But the company also spent millions on sales and marketing and developing online features for its stores. As a result, it lost $9.26 million, or 40 cents a share, in the first quarter. All the red ink has led some to be skeptical of the company's future. "The market is uneducated. People are buying on blind faith," said Dan Fine, whose Seattle company, Fine.com, builds and maintains Web sites. "One day, people will wake up and smell the coffee. But to tell the truth, I could be a little bit jealous."