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

To: B.J. Lee who wrote (31136)	12/25/1998 2:35:00 PM
From: John Goode	Respond to of 164684

How can you justify AMZN's price? Even the analysis are dumbfounded by the recent moves in internet stocks. It's clear that they are ALL trading on momentum, and not on fundamentals. You can't tell me that a 50 point move in one day based solely on an analyst's price target is rational. I don't believe there's many cases in stock market history (perhaps the biotech craze) where stocks have traded up to such lofty levels. And, in all cases in history, stocks finally returned to more normal levels. So where will all these stocks be in a year or two? Lets just imagine AMZN finally pulls a profit in 2001 (let's say .50/share), and growth slows to around 50% (top and bottom-line) per year, how do you think the stock would be valued? Well, a standard profitable company growing at 50% per year might command a PE up to 100, especially for a brand-name such as AMZN. So, assuming that's the case, seems like the stock is at best a 100 stock in several years. Bottom line is: AMZN is in a commodity retail business. Profit margins are slim, and they have yet to prove that their business model will produce sustainable profits. Don't get me wrong...it's a great company. Just seems to be overvalued at these levels. AMZN, like most internet stocks, have simply become trading vehicles. Most people don't care about revenue, growth, margins, etc. They just want to get in for the next 50 point move. btw: I hold no investment, either long or short. Good luck to both sides, and Merry Christmas to all!