Advertisement
YOU ARE HERE: LAT HomeCollectionsFixme

Technology | TECHNOLOGY BRIEFS

Amazon Shares Fall 11% as Sales Concerns Grow

November 29, 2000|Bloomberg News

Amazon.com Inc. shares fell 11% Tuesday after Banc of America Securities analyst Tom Courtney said he would avoid the unprofitable Internet retailer amid concerns that sales growth would continue to slow. The stock, which has lost 67% of its value this year, fell $2.97 to $25.03 on Nasdaq.

Based on the midpoint of Amazon.com's fourth-quarter sales forecast of $950 million to $1.05 billion, year-to-year sales growth would slow to 47%, Courtney wrote in his report. That would trail the third quarter's 79% jump. Investors should question the size of the projected drop in the growth rate, especially because it comes during the holidays, he wrote.

Sales growth in 2001 is expected to slow further, to 40%, while the Seattle-based company is expected to have a loss of $700 million for the year, Courtney added.

"We find it increasingly difficult to justify the company's valuation in light of its profit outlook, as well as near-term trends in its rate of growth," he wrote.

Separately, Amazon.com said it's opening a wireless telephone store, offering cellular phones, services and accessories. Customers will receive an introductory $50 discount on cell phone and accessory purchases of $100 or more.

"The No. 1 request from customers has been, 'When are you going to sell wireless products like cell phones?' " Amazon.com Chief Executive Jeff Bezos said at a news conference in Seattle.

The new store will offer service plans from AT&T Wireless Group, Sprint PCS and VoiceStream Wireless, and accessories by Samsung Corp. and other manufacturers.

Advertisement
Los Angeles Times Articles
|
|
|