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Microcap & Penny Stocks : TSIG.com TIGI (formerly TSIG) -- Ignore unavailable to you. Want to Upgrade?

To: NicktheGreek who wrote (12350)	12/16/1998 6:11:00 PM
From: AJ Berger	Read Replies (1) \| Respond to of 44908

If you only found 3 F's, read this about what all the other average people are doing to internet stocks. genius's like me see it for the insanity it's obviously become, thus my guarded enthusiasm for TSIG of late... Just Another $2.4 Bln Day for Amazing.com: David Pauly Dec 16 1998 17:09 New York, Dec. 16 (Bloomberg) -- Many folks are frustrated because they missed Amazon.com Inc. at $18 a share when it went public in 1997. Or because they could have bought it at $110 in October. Or even at yesterday's close of $242.75. Not to worry. They still have time. CIBC Oppenheimer analyst Henry Blodget says the stock of the company that pioneered book-selling on the Internet will rise to $400 in 12 months. On that prediction, Amazon.com today shot up another $46.25 to $289. That was a one-day gain in total market value of $2.4 billion. Amazing.com. ''The insanity goes on and on,'' said David Simons, managing director of New York-based Digital Video Investments, a research firm. People can't get enough of Seattle-based Amazon.com though nobody knows when, if ever, the company will turn a profit. Its sales totaled all of $154 million in the first nine months of 1998. Amazon.com clearly has a good idea. I just ordered four more books from its Web site over the weekend. Barnes & Noble Inc. and Borders Group Inc., the two biggest U.S. companies with real bookstores, have been forced to follow Amazon.com onto the Internet. Amazon.com now also sells RECORDED MUSIC and videos on the Web. Still, even a wildly successful Amazon.com couldn't justify the money speculators are throwing at its stock. Assume -- pretend might be a more suitable word -- that Amazon.com puts Barnes & Noble and Borders out of business. Assume further that it captures all of its competitors' sales and profits. B&N and Borders' combined annual sales are $5.5 billion. In the past two years, they had an average combined profit of $121 million. Some P/E With today's expansion of the balloon, Amazon.com has a market value of $15.2 billion. If Amazon.com suddenly benefited from all of Barnes & Noble's and Border's earnings, its stock would be trading at 126 times earnings. Stocks in the bellwether Standard & Poor's 500 Index now trade at 30 times earnings -- and the height of that number worries many analysts. Amazing.com. Now assume analyst Blodget is a prophet, and Amazon.com trades at $400 a share a year from now. The company's market value would be $21.2 billion and its price/earnings ratio, under our assumptions, would be 175. Amazing.com, indeed. Granted, while we're pretending, Amazon.com might improve on its rivals' combined net profit margin of about 2.2 percent. It wouldn't have the cost of keeping up all those stores. And granted, this exercise doesn't account for sales of compact discs and videos, and whatever other revenue Amazon.com can garner from the Internet. But, come on. Microsoft Corp.'s highest P/E in the past eight years was 65. And that was earlier this year, when the software company had become so powerful the federal government was attacking it on antitrust grounds. In the real world, it might be Barnes & Noble and Borders that drive Amazon.com out of business. B&N has taken on Bertelsmann AG, the big German publisher, recorded music and film company, as its Web site partner. Amazon.com also gets competition now from Books-A-Million Inc., the third-largest bookstore chain. Its shares today jumped 80 percent. Amazon.com's Web site is great -- though you can't smell the books. I wish the company well. Can't say the same for the investors who think its stock is a deal at $289.