Enviado: 30/12/2004 13:4729-12
Amazon.com (AMZN) 44.63: Over the past two trading sessions, Amazon has seen its stock increase from $39 a share to $44.63, with the stock moving over $45 at one point yesterday. We now know that the company had a strong holiday selling season, but is the stock set up for a quick trade?
The first driver for the stock two days ago was the announcement by the company that this would be the biggest holiday selling season in company history. This would not only be expected for a growth company, but demanded by the investment community given the stock valuation. Nevertheless, the announcement was met with surprise as the stock surged on the news.
The next day the press focused on another part of the announcement that noted that consumer electronics accounted for the most sales. This is a big step forward for the company as it shows that the consumer base that it is selling to has progressed higher on the learning curve. Amazon's key market of books, CD's and movies is something that consumers are used to and understand. Buying more complicated items speaks to the trust that consumers now have in Amazon.
The stock was upgraded yesterday by a brokerage. This was its first upgrade since late September, and first from a major investment bank since late April. The last time a major firm upgraded the stock, Smith Barney moved its rating to Hold from Sell. Yesterday's increase to Outperform rating from Bear Stearns is equivalent to a "buy" rating.
These recent events are certainly good for the company and for the stock, but moving higher by about 15% over the course of two sessions based on holiday sales numbers and an upgrade is a little much. The retailer previously noted that costs continue to rise, not only for products that it sells on its site, but also the technology costs involved in maintaining and expanding the website.
So the future does look a good deal better for Amazon, as the company is seeing its revenue stream diversified amidst strong holiday sales. The stock is even poised to move higher again today. However, investors and traders alike should take note that short term players (hedge funds) don't take many vacations. The stock may have overreacted to the recent news.
Amazon.com (AMZN) 44.63: Over the past two trading sessions, Amazon has seen its stock increase from $39 a share to $44.63, with the stock moving over $45 at one point yesterday. We now know that the company had a strong holiday selling season, but is the stock set up for a quick trade?
The first driver for the stock two days ago was the announcement by the company that this would be the biggest holiday selling season in company history. This would not only be expected for a growth company, but demanded by the investment community given the stock valuation. Nevertheless, the announcement was met with surprise as the stock surged on the news.
The next day the press focused on another part of the announcement that noted that consumer electronics accounted for the most sales. This is a big step forward for the company as it shows that the consumer base that it is selling to has progressed higher on the learning curve. Amazon's key market of books, CD's and movies is something that consumers are used to and understand. Buying more complicated items speaks to the trust that consumers now have in Amazon.
The stock was upgraded yesterday by a brokerage. This was its first upgrade since late September, and first from a major investment bank since late April. The last time a major firm upgraded the stock, Smith Barney moved its rating to Hold from Sell. Yesterday's increase to Outperform rating from Bear Stearns is equivalent to a "buy" rating.
These recent events are certainly good for the company and for the stock, but moving higher by about 15% over the course of two sessions based on holiday sales numbers and an upgrade is a little much. The retailer previously noted that costs continue to rise, not only for products that it sells on its site, but also the technology costs involved in maintaining and expanding the website.
So the future does look a good deal better for Amazon, as the company is seeing its revenue stream diversified amidst strong holiday sales. The stock is even poised to move higher again today. However, investors and traders alike should take note that short term players (hedge funds) don't take many vacations. The stock may have overreacted to the recent news.
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