Amazon CEO Warns Not To Buy Tech Stocks

As the high-tech sector continues to take a battering on Wall Street, Amazon.com founder and chief executiveofficer Jeff Bezos is reportedly warning investors to steer clear ofInternet stocks.

In an interview with BBC television that is scheduled to air in the United Kingdom Wednesday, Bezos described the e-tail giant’s stock as “volatile,” accordingto published reports.

“We are not a stock you can sleep well with at night,” Bezos reportedly saidin his appearance on “Money Programme,” a BBC show.

“We’re working hard in building a lasting company and we think over timewe’ll build a very valuable company,” Bezos was reportedly quoted as sayingby the BBC. “But for a short-term investor, or for a small investor, Iwouldn’t invest in Internet stocks.”

Bezos’ comments will be part of a program titled “The Great Dot Con,” whichthe BBC said addresses the meteoric rise and crash of the Internet sharesand the dampening effect the collapse is having on the overall U.S. economy.

Bad Timing?

The report of Bezos’ warning comes on the heels of news that the U.S.Securities and Exchange Commission (SEC) is reportedly investigating stocksales he made in February.

A report published last week by the New York Times said that Bezos is beingexamined for possible insider trading of the e-tail giant’s shares.According to the paper, Bezos sold 800,000 Amazon shares, worth approximately US$12 million, one day before a negative analyst report about the company wasmade public, but after company executives had seen an advance copy of thereport.

The February 6th report, by Lehman Brothers bond analyst Ravi Suria, predicted thatAmazon could face a cash crunch later this year and advised investors toavoid Amazon convertible bonds.

Amazon, however, has maintained that the timing of Bezos’ stock sale wastriggered by the release of the company’s quarterly earnings report and notSuria’s report. The company told the E-Commerce Times on Friday that it had not beennotified of the SEC investigation.

Credibility Concerns

Despite the e-tailer’s assurances that it would soon be turning a profit,the New York Society of Security Analysts reportedly sent a letter Thursdayto Bezos asking for clearer proof that the Internet heavyweight hassufficient funds to continue operations, according to the Financial Times.

The analyst group, an organization of investment professionals, called intoquestion the reliability of recent comments by Amazon’s management and saidthe company was facing a “credibility crisis.”

Amazon, however, dismissed these charges, according to the Financial Times, saying that the “only credibilitycrisis” is with Lehman’s report.

Amazon stock, which has lost roughly 80 percent of its value over the pastyear, hit a near 52-week low Monday morning, losing $1.44, or 11.73 percent,to trade at $10.81.

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