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

To: Rob S. who wrote (12540)	8/4/1998 1:33:00 PM
From: umbro	Respond to of 164684

On the issue of whether AMZN receives a good deal on its expensive stock, used as currency in acquisitions, I think we have to give the sellers credit for recognizing the current high valuation, and to discount accordingly. Certainly, in the current environment, those companies could have sold to other buyers, as the market for niche internet businesses is definitely a seller's market. Therefore, it would seem reasonable that either the price of the companies was marked up, or there are acquisition terms that dictate a certain valuation, without regard to stock price (these might be done as warrent held by shareholders of the acquired company, etc.) My guess is they kept it simple, and just marked up the value of the acquired companies to be on a par with AMZN's current valuation (a Price-to-sales of say, 20:1).