Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Glenn D. Rudolph who wrote (8781)	7/4/1998 10:04:00 AM
From: tonyt	Respond to of 164684

Barrons: "Internet stocks enjoyed one of their strongest weeks ever, continuing an incredible run that began a month ago, amid feverish interest from retail investors and as bloodied shorts moved to cover their positions. The runup came amid rumors that big media companies are looking for real estate on the Web. Amazon.com soared 29 3/4 to 124 and now has doubled since June 12. Yahoo! rose 24 3/16 to 172 7/8, after hitting a record 179 1/2 Friday. Yahoo! is up 50% in the past three weeks. Excite gained 23 to 99; DoubleClick jumped 27 3/4 to 71 5/8, while America Online, the group's blue-chip stock, was up a mere 2 1/2 to 110 5/16. Netscape Communications, which is trying to restyle itself as an Internet "portal" company, following the leads of Yahoo! and Excite, came to life, rising 14 1/2 to 41 5/16, stoked by takeover speculation after a company official said Netscape is looking to strike deals with major media organizations. The valuations of these stocks defy any sort of traditional analysis, but their admirers say the old rules no longer apply. "Do you Yahoo? We do," was how Mary Meeker, the bullish Internet analyst at Morgan Stanley, titled an upbeat report on the company awhile back. Meeker went through some of the financials, but her bottom line came down to this: "What's the value of leadership in the fastest-growing medium in the history of the planet?" Meeker asked. "Yes, we live in special times." With a market value of $9 billion, Yahoo! trades at 60 times projected 1998 revenues and at almost 400 times estimated 1998 profits. But these cold figures don't matter to Yahoo!'s fans because of what they see as the company's tremendous growth potential and franchise value. Amazon.com, meanwhile, has a market capitalization of almost $6 billion, equal to the combined values of Barnes & Noble and Borders Group, the two leading booksellers in the country, which sell 20 times as many books as Amazon. Amazon isn't expected to earn a profit until the year 2000, but that doesn't faze its admirers. They're more interested in sales growth and Amazon's ability to build its franchise. Amazon also has been lifted by optimism over its plans to sell compact discs over the Internet. Amazon acknowledged in a recent regulatory filing that its rapid expansion -- it's one of the fastest-growing retailers in history -- is "expected to place a significant strain on the company's management." Amazon's employee head count has risen fivefold, to about 800 from year-end 1996 to the end of the first quarter. Amazon's detractors say its valuation is outrageous and that its supposed advantages over traditional bookstores may not be so significant because of high marketing and technology costs. But few are listening to those arguments now. It wouldn't be surprising to see a pickup in insider sales in the Internet stocks, given these valuations. Amazon's surge lifted shares of other booksellers. Barnes & Noble rose 8 11/16 to 44 1/2, and Borders was up 3 to 39 5/8".