Amazon CEO Warns Not To Buy Tech 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," according to published reports.

"We are not a stock you can sleep well with at night," Bezos reportedly said in his appearance on "Money Programme," a BBC show.

"We're working hard in building a lasting company and we think over time we'll build a very valuable company," Bezos was reportedly quoted as saying by the BBC. "But for a short-term investor, or for a small investor, I wouldn't invest in Internet stocks."

Bezos' comments will be part of a program titled "The Great Dot Con," which the BBC said addresses the meteoric rise and crash of the Internet shares and 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 stock sales he made in February.

A report published last week by the New York Times said that Bezos is being examined 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 was made public, but after company executives had seen an advance copy of the report.

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

Amazon, however, has maintained that the timing of Bezos' stock sale was triggered by the release of the company's quarterly earnings report and not Suria's report. The company told the E-Commerce Times on Friday that it had not been notified 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 Thursday to Bezos asking for clearer proof that the Internet heavyweight has sufficient funds to continue operations, according to the Financial Times.

The analyst group, an organization of investment professionals, called into question the reliability of recent comments by Amazon's management and said the company was facing a "credibility crisis."

Amazon, however, dismissed these charges, according to the Financial Times, saying that the "only credibility crisis" is with Lehman's report.

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