Glenn:
After reading your offhanded observation as to the number of folks you've "met" on the thread who live in the San Jose area, it struck me (yet again) how quick people are, in general, to (mis) ascribe their own preferences and characteristics to others. What percentage of the book buying consumers do folks here think are like us (bull or bear, but tied to their damned computer screen)??? Bulls, I assume think that it's high, but how high. The only market sizing I've seen from a bull is the "worldwide book market is $82 billion). Anyone care to segment the marketplace? By language of purchase? By book buying demographics, income levels, geography, computer literacy, propensity for online purchases, etc. etc. My gues is that the Silicon Valley crew, that's so amply represented here (and overrepresented in terms of the book reading public) is hardly representative of your average book buyer.
Short rebate, if i'm not mistaken, is the following. When you short your shares, the proceeds are set aside in a dedicated account. What happens to them until you close out your position? Typically, the proceeds are invested in short term money market instruments which earn some interest rate. How much of that do you as Joe Retail get? Zero. If you're an institutional investor (or high net worth individual), you get some rebate rate, ie, the broker with whom you've shorted your shares will give you some rate of interest (some % of what they're earning) that you'll earn on the short proceeds.
On friday, I spoke with some friends who work at hedge funds and bulge bracket firms. Concensus is that there is close to no institutional ownership on the buy side (having taken profits long ago) and it's a lot of retail ownership and market maker squeezing, that even the hedge funds are having difficulty getting ahold of any shares to short from the sell side at this point (one bulge bracket had less than 10,000 shares available), and that the smart money is simply creating synthetic shorts (+Put -Call) and using options. Where it goes from here in the short term, I have no idea (unlike some prophets). What I do know is that amzn's valuation is fast becoming the latest running joke on wall st.
One other comment. Replying to Bateman is useless. Why waste your time? The thought that those who are short amzn are well-capitalized and/or boxed their positions long ago, thus avoiding "billions in losses," has apparently never crossed his mind. If his purpose here was to contribute to an online community and learn through exchange, perhaps it might have. It seems however, that he'd (she'd?) rather bait people so the posts don't deserve to be dignified with a response from you.
Below, an excerpt from an article reached through Quicken's home page.
quicken.com
Financial Focus Article
Hot Internet Stocks:
Will they continue to soar?
by Louis Trager
Nothing ever grew to the sky like Jack's beanstalk, until Internet stocks came along. The Internet Fund, a mutual fund born in 1996 and invested primarily in Internet companies, has soared almost 50 percent this year, compared to a 14 percent increase for the S&P 500 as of June 19. Hot e-commerce, content, and search companies, such as Amazon.com, America Online, CNET, Excite, SportsLine USA, and Yahoo!, have doubled or tripled in price since the beginning of the year.
While many Internet stocks with minimal earnings have sky-rocketed, creating abundant wealth from ether, the high altitudes they've reached are scary compared to overall stock-valuation levels. Buyers are betting they will be paid back--and more--from future profits. Yet few cyber-companies are profitable and it's unclear when they will be. The prices of net stocks are clearly not tethered to conventional measures of value. The price/earnings ratios of many publicly traded
Internet companies are stratospheric (AOL's P/E, for example, is a sky-high 325). While the high valuations are nerve-wracking, the more terrifying prospect for money managers and securities analysts is the possibility that client-investors may miss out on spectacular gains. "A lot of commerce and services are going to move to the Net, and there are many, many opportunities for nimble new companies to build businesses," says adviser Michael Murphy of the Overpriced Stock Service. But investors "don't have easy ways to figure out what Internet companies are worth," Murphy adds. "Amazon.com is worth 50 percent more than Barnes & Noble," Murphy says. "Yet Barnes & Noble is profitable, while Amazon.com is not and has much smaller revenues to boot. With Internet stocks, investors are in a zone where company valuations are not tied to any fundamentals." |
