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

To: Glenn D. Rudolph who wrote (11730)	7/25/1998 6:30:00 PM
From: Rob S.	Respond to of 164684

Glenn & all - here is some interesting information from the Motley Fool site: <Let's talk about Amzn's stock price and how it got there. Yes, I can buy every bear, bull, and TMF's point of view. What I scratch my head over is, how did these Internet stocks get such incredible valuations? I have a theory on Amzn's claim to fame. I believe a private fund manager, by the name of Jeff Vinik (manager of the private Vinik management fund, this fund requires a miniumum $2.5 million investment and will not release a prospectus to anyone, unless you meet their qualifications), decided about 3 months ago that Internet mania was in the making, and for the forseeable future, was bullet proof. He and some other institutions (MSDW,Merril etc decided that the timing was perfect and Amzn was chosen as the perfect stock, due to its thin float, soaring sales and Wall Streets lack of demand for profits. So the deal was made, and the Amzn float was bought and controlled. The short squeeze started causing all the retail shorts to 'surrender'. Wall Street calls it 'buy to cover'. As the squeeze gets tighter, a phenomenon takes place as no shares become available to short (except Datek). It is now a controller's paradise. They just sell to the highest bidder the stock, and buy back the stock that the little investor sells to take in a profit. The contollers haven't seen such a money making scheme since ??. They get the stock price up to 145 and now make tons of money as the stock price has wonderful fluctuations (yesterday low117 high 131). How would you like to control a stock that you can sell @ 131 and buy back at 117? All in one day! Next week should be even more profitable. The controllers have no worry about the big sellers coming in as they are them. How high they can bid it up to will only depend on how many little guys show up to buy this bullet proof stock. For a while the only way the little guy can make any money here is to be a little aggressive day trader. Do we have any out there? Those who control the float control the stock price. Trust me. Fool on.> My response was that about 1.5 million more shares will be available for sale this qtr. but that might not be enough to scare Vinik off of his roost if he indeed has a large portion of the float locked up at this time. I think his fund would want to start to unload it when sales momentum started to trend down and competition was heating up. That is just starting to happen now. They would probably unwind completely while the fever pitch interest was stil hot. Then they might even get on the short-sell side themselves. It is a plausible explanation for the irrational nature of this beast. I don't have any other information than this or any good way to substantiate it. It would make a nice article for the WSJ if they could prove it.