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

To: mrc who wrote (30416)	12/18/1998 7:59:00 AM
From: wiley murray	Respond to of 164684

MRC:We agree.Watch AMZN pre opening pricing. I am looking for traders to put in VERY low bids and they will get them! There will be a lot of interest in that it is a split day of record. I agree in that there will be a lot of SELLING in the early part of the day , and buying at the end. IMO we will have a low of 240 and a high of 290 at the close.Monday will see a BIG down day. Comments?

To: mrc who wrote (30416)	12/18/1998 8:41:00 AM
From: wiley murray	Respond to of 164684

ALL: Friday, December 18, 1998 THE DAY AHEAD: Many analysts two-faced about Amazon.com valuation By Larry Dignan TDAIN December 18, 1998 7:20am ZDII Amazon.com Inc.'s (Nasdaq: AMZN) big run this week was downright alarming, but not because of valuation, a $300 stock price, or even that an analyst said it would hit $400 a share. It was scary because many analysts with "buy" ratings are privately worried about the valuation of Amazon.com, but won't budge on their ratings. Would you buy Amazon.com at this price? Add your comments to the bottom of this page. What does it take for these analysts to downgrade Amazon.com on basis of valuation? Maybe the magic number is $500 a share. Possibly $1,000 a share. Would they buy at this price? Probably not. It's no secret Amazon.com (chart) is overvalued. Publicly, many analysts slap "buy" and "strong buy" ratings on Amazon.com. Privately, they are amazed by the profitless online retailer's market cap of $15 billion. Of 17 analysts with ratings on Amazon.com, six have the equivalent of "hold" ratings. The rest have "buy" ratings, according to Zack's Investment Research. There are a few analysts in the "hold" camp. On Thursday, Merrill Lynch analyst Jonathan Cohen reiterated a "neutral" rating -- the equivalent of sell. Cohen's rating had little effect on Amazon.com shares because he has been saying for months that Amazon.com was a $50 stock. Wheat First cut Amazon.com to a "hold" on Thursday, but wasn't in the "buy" camp. Everen Securities also downgraded the stock based on valuation in early December. The majority of analysts, however, cling to the "buy" ratings. Until a "strong buy" guy downgrades Amazon.com the "hold" folks look like worrywarts. Don't expect any downgrades from the "buy" camp. Here's the dilemma for the Amazon.com analysts with the "buy" ratings: They love Amazon.com because of the company's growth, management and strong execution. Amazon.com (financials) is the e-tailing king. But no matter what math you use, justifying Amazon.com's stock price is more art than science. Henry Blodget, an analyst with CIBC Oppenheimer, raised his 12-month price target to $400 and showed his math based on a lot of assumptions. The bottom line is Amazon.com's stock price will climb as long as revenue grows. Like a real-world retailer, Amazon.com, will have a blow-out fourth quarter and then sales will slip in the first quarter. Wall Street gurus know Amazon.com shares are too pricey, but why be a hero and say Amazon.com shares are overvalued when the stock will continue to gain? Amazon.com was overvalued at $122 a share and more overvalued at $200 a share, but still hit $300 on Wednesday. "That's the dilemma," said Scott Appleby, an analyst with ABN Amro. Appleby has a "hold" rating on Amazon.com based solely on valuation. He changed his rating when Amazon.com was at about $122. "It was a good call for about three months," he said. When asked about the lack of downgrades few analysts in the "buy" camp wanted to talk about it. Those analysts that did talk only did so off-the-record. The conversations went like this: ZDII: So how about that Amazon.com? Analyst: Something huh. ZDII: Would you say Amazon.com is overvalued now? Analyst: Umm. ZDII: So do you expect to see any downgrades on valuation? Analyst: Umm, hard to say. ZDII: I see you have a strong buy rating on Amazon.com. Are you concerned about valuation at all? Analyst: We're not calling day-to-day movements. It's a loser's game. Then analysts recite those long-term fundamentals, which haven't changed since Amazon.com shares were a $100 cheaper. When the conversation goes off-the-record analysts say Amazon.com is overvalued and could see a steep correction. Blodget said in his report that Amazon.com faces a possible correction. So what's an investor to do? For starters, don't listen to analysts when deciding whether to buy into Amazon.com. Then use some common sense. There will probably be a pullback when Amazon.com sales dip in the first quarter. Wall Street overreacted on the way up and it will overreact on the way down. Just remember Amazon.com will still be overvalued then too.