Dec. 1 (Bloomberg) -- Amazon.com Inc. shares are overvalued because its core business of selling books and music online is “disappearing” and it’s competing with larger rival Apple Inc. in tablet devices, according to Columbia University’s Bruce C. Greenwald.
“Amazon trading at 100 times earnings is almost a joke,” Greenwald, a professor of management and asset management at the New York-based university, said today at the Bloomberg Hedge Fund Conference hosted by Bloomberg Link. “If Amazon doesn’t deliver profitability in the long run, it’s not going to stay at 100 times earnings.”
Amazon, based in Seattle, trades at 103 times reported earnings for the past year, down from this year’s peak of 129.8 in October, according to data compiled by Bloomberg. The company’s shares gained 2.5 percent to $197.16 in New York trading, and have climbed 9.4 percent this year.
--Editors: Steven Crabill, Christian Baumgaertel
To contact the reporters on this story: Jeff Kearns in New York at email@example.com; Lisa Murphy in New York at firstname.lastname@example.org
To contact the editor responsible for this story: Christian Baumgaertel at email@example.com -0- Dec/01/2011 16:25 GMT