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ANALYST WATCH: Dark chapters in the &#034story&#034 suffered through the most demoralizing series of events in its brief existence this week, capped by a flurry of downgrades from analysts who not so long ago called the stock the backbone of any Internet investor's portfolio.

    Where have all the $300 a share price targets gone?

    At this point, it's almost cruel to point out the obvious. Suffice it to say, if you're still holding (Nasdaq: AMZN) shares, you're either an eternal optimist or one of the unfortunate souls who got suckered into buying the stock at $100 or $200 a share.

    Saying that, it's only fair to point out that some people (read: institutional investors and Amazon employees) made a killing on the stock back in its heyday. In the past two years, it split 2-for-1 twice and 3-for-1 on another occasion.

    Even at around $30 a share these days, a lot of money was made by a relatively small number of investors.

    The fact that Internet analysts are turning their backs on the stock at this point is predictable and pathetic.

    The same guys and gals who made their careers by lauding during its mercurial rise and then bolted for greener pastures at larger firms are the very same analysts who are now bashing the company for the warts that were there all along.

    While the jury still is out on, we've seen enough evidence to convict most of these analysts of reckless and unabashed cheerleading for the purpose of advancing their own careers and clout on Wall Street. Not to mention the profits for their respective firms.

    In my opinion, it doesn't matter if this was intended or by accident. If these analysts got caught up in the dot-com hype and couldn't make reasonable judgments about Amazon or any of the other Internet flops, how can investors take these latest downgrades seriously?

    At this point, you'd think some analyst from some firm would step up and upgrade the stock now that's its trading at a 52-week low. The risk at this point seems minimal. After all, close to $600 million in quarterly sales isn't exactly chump change.

    But it's not going to happen.

    On Thursday, SG Cowen's Scott Reamer cut the stock from a "strong buy" recommendation to a "buy." Goldman Sachs' Anthony Noto cut its fiscal 2000 estimate from a loss of $1.20 a share to a loss of $1.26 a share.

    Then, Prudential Securities' Mark Rowen cut Amazon's 12-month price target to $40 a share from $80 a share.

    All these moves came after it beat analysts' loss estimates in its second quarter but posted disappointing sales.

    Merrill Lynch's Henry Blodget, perhaps the loudest cheerleader of all, cut the stock to an "accumulate" rating Thursday and lowered his fiscal 2000 and fiscal 2001 estimates.

    "We still believe that, after it settles from the shock of this quarter, the stock could perform well for the balance of the year, as a result of improved sentiment toward consumer e-commerce as we approach the holiday season," Blodget wrote in a research note.

    That's assuming Amazon's able to recover from the abrupt departure of COO Joseph Galli, who left to take the top post at VerticalNet one day before Amazon reported its second-quarter results.

    A company that's so dependent on consistently delivering goods and services to its clientele can only be hurt by the exodus of such a key executive. Amazon can't afford any downtime while his successor gets up to speed.

    Adding insult to injury, Lehman Brothers finally got its story straight this week when equity analyst Holly Becker dramatically "threw in the towel" on the stock just as its bond analyst had done more than a month ago.

    "To justify current valuation, the company must expand beyond books, and to date the company's new businesses have demonstrated a lack of traction," Becker said ahead of the earnings report. "Despite its powerful brand name and large, loyal customer base, there is softness in key consumer metrics."

    At least Lehman Brothers is no longer talking out of both sides of its mouth.

    If only the rest of the Internet analysts could do the same.
    • Amazon continues to slide after 2Q, downgrades