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The Spokesman-Review Newspaper
Spokane, Washington  Est. May 19, 1883

Investors Snap Up Amazon.Com Company’s Stock Leaps 63 Percent During First Day Of Trading

Thomas W. Haines Seattle Times

Amazon.com reaped quick gains for early investors Thursday as the stock soared during the company’s first minutes of trading.

Shares opened at $29.25, up more than 63 percent over an initial price of $18. In heavy trading, the price dropped to a low of $23.125 then closed at $23.50.

The Internet bookseller, which has yet to turn a profit, gained a market value of more than $690 million based on the opening share price.

The biggest individual winner was Amazon.com founder Jeff Bezos, 33. His 9.88 million shares were valued at roughly $290 million at the opening. Former Microsoft executive Patty Stonesifer, who sits on the company’s board, holds 75,000 shares, worth $2.2 million. Former McCaw Cellular executive Tom Alberg, one of the earliest investors in the company, holds 195,000 shares, worth $5.7 million.

Amazon.com’s early performance did not match the giant leaps of more than 100 percent seen by Yahoo and Netscape in years past. But it was above the expectations of even some of Amazon.com’s more bullish supporters.

Ryan Jacob, an analyst with IPO Value Monitor who likes Amazon.com’s chances, conceded that later drops in trading demonstrated that not all investors are convinced Amazon.com, or the Internet, will pan out.

Amazon.com stock “will have its share of flippers,” he said.

Initial public offerings in the technology sector have lagged this year, posting an average first-day gain of 11 percent, compared with more than 30 percent a year ago. That trend took a significant turn Wednesday, however, when Rambus, a Silicon Valley computer-chip company, saw its stock jump from $12 to $30.25 a share during its first day of trading.

Amazon.com, the Internet bookseller founded in a Bellevue, Wash., garage by Bezos in 1994, is one of the few early retail success stories on the Internet.

The company has posted consistent sales growth. First-quarter sales this year neared $16 million, up from $875,000 a year earlier. But losses have increased as well, to $5.7 million for 1996 and more than $3 million for this year’s first quarter.