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In the end, some say, the stock price will never depend on whether an Internet retailer becomes profitable. “Nobody is buying these stocks based on profits,” says Analyst Berry. The stocks are so wildly overvalued right now that even if they did begin to post profits they would still be wildly overvalued. “There are not enough consumers on earth to justify the valuations,” he says. Trading, says Berry, is based on people thinking that stock prices will continue to rise forever. “Search engines reached their peak, and e-commerce will sometime soon,” he says. •
Elayne Robertson Demby is a Weston, Conn.-based freelance business writer.