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

To: Dwight E. Karlsen who wrote (9121)	7/6/1998 11:50:00 PM
From: umbro	Read Replies (1) \| Respond to of 164684

INKTOMI CORP. (INKT) 71 +23. Valuations are a thing of the past as this software developer of Internet caching products is perfect proof of the how investors no longer apply the fundamentals that are instrumental in evaluating companies. This issue has appreciated more than 285% in less than one month since it went public, 46% today alone. While revenues at this provider of scalable cluster technology are expected to grow at around 145% in the coming year, the movement in price since the company made its debut last month at $18 a share is quite remarkable. The again, this is probably true about any stock associated with the Internet (see story below). Today, the company received two initial ratings from its underwriters, Goldman Sachs and Hambrecht & Quist. While Goldman started coverage with a "market outperform," H&Q initiated coverage with a "buy" rating. Keep in mind, however, that while both firms underwrote the initial public offering, they significantly underpriced this issue given the reception the stock received on its debut when it doubled in price. This is nothing in comparison to what the stock has done since. While we would like to believe that this company is worth every penny that investors are obviously paying up, it is hard to imaging that even with its rapid revenue growth and leading Internet technology that business will be able to keep up with the rise in the stock. To be sure, no earnings are expected to be posted until the year 2000, at the earliest. The stock may manage to hang on to its gains as long as the Internet fever reigns supreme and sales growth can be maintained. However, at the first sign that the hot money is going away from this sector, don't be surprised to see a major price correct occur in this issue. 14:45 ET ****** INTERNET VALUATIONS: As you probably already know, Internet stocks do not trade on multiples to earnings, as most are at least several years away from producing profits. Instead, analysts and investors rely on revenues (either trailing 12-months or projected 1 or 2 yrs out) as a gauge of an Internet stock's relative valuation. Although it is very difficult to put a cap on Internet valuations given the strong demand for industry stocks, (particularly in the leading search-engine names) we can look for names which currently look "cheap" relative to the remainder of the group. Investors who engaged in this type of research when the larger-cap Internet stocks rallied earlier this year were oft times rewarded with 50% to 200% gains as money began to sprinkle into the 2nd- and 3rd-tier names. The following is a short list of Internet stocks, from the top-tier to the bottom-wrung, and their current valuation on a 12-month trailing revenue basis. One should keep in mind that as earnings are released for the calendar 2nd qtr, these multiples will be lowered dramatically as the latest quarter's sales figures will be included in the calculation. For example, if Yahoo! reports another 200% yr/yr increase in sales as it did in Q1, the company's trailing Price/Sales ratio would fall from its current level of 103 to 78, a 24% reduction. So, in essence, it is just a matter of days before Internet valuations contract dramatically. Price/Sales Ratio Market Cap Yahoo! (YHOO) 103 $9 bln Amazon.com (AMZN) 31 $6.8 bln Lycos (LCOS) 38 $1.7 bln Egghead.com (EGGS) 1.05 $307 mln Netscape (NSCP) 9.6 $3.9 bln InfoSeek (SEEK) 28 $1.2 bln Audio Book Club (KLB) 8.7 $98.4 mln DoubleClick (DCLK) 32 $1.2 bln NetGravity (NETG) 49 $345 mln CNET (CNWK) 26.7 $1 bln Spyglass (SPYG) 11.8 $172.5 mln Excite (XCIT) 39.5 $2.59 bln CDNow (CDNW) 15.3 $380 mln (source: Briefing.com)

To: Dwight E. Karlsen who wrote (9121)	7/7/1998 11:26:00 AM
From: Dell-icious	Respond to of 164684

I have no position in Amazon. I have used amazon to buy books thrice recently. Once they delivered well. Once they sent the wrong book and then when I complained they sent a replacement and asked me to mail the other one back - which I haven't bothered to since I like the wrong book and what the heck - they can pay for their bad service. The last time I asked for a used book search and they kept badgering me for a credit card number even after i told them that I was no longer interested.