Amazon chief's net stock warning

Amazon was once the darling of US analysts

The head of online retailer Amazon.com has warned private investors not to put their hard-earned cash into "volatile" internet stocks.

Jeff Bezos, founder and chief executive of Amazon.com, which has expanded from selling books to a range of popular goods, said: "We are not a stock you can sleep well with at night. We're a volatile stock."

We are not a stock you can sleep well with at night

Jeff Bezos

Mr Bezos' comments feature in BBC Two's Money Programme report, The Great Dot Con.

The programme looks at the rise and fall of internet shares, and their part in the US economic downturn.

His comments come as he faces investigation over the sale of some of his own shares in the company.

The end of the fairytale

Similarly, the Financial Times newspaper reports that US investment guru Warren Buffett has recently scolded investors for falling victim to the "fairytale" of the internet and technology boom.

In his annual letter to shareholders of Berkshire Hathaway, he writes: "They know overstaying the festivities... will eventually bring on pumpkins and mice.

"But they nevertheless hate to miss a single minute of what is helluva party."

His letter accompanies results from the insurance and investment company.

"Nothing sedates rationality like large doses of effortless money," he adds.

Once the darling

Seattle-based Amazon.com had been a darling of US analysts, with shares surging to more than $100 in December 1999.

However, the group has since lost much of that value.

Mr Bezos said: "We're working hard on building a lasting company. And we think over time we'll build a very valuable company.

"But for a short-term investor, or for a small investor, I wouldn't invest in internet stocks."

Highs and lows

In February, the investment bank Lehman Brothers estimated that Amazon.com was running out of cash and it warned against buying the company's bonds.

Two weeks prior to that, Amazon.com cut 1,300 jobs, despite reporting a substantial sales rise.

Jeff Bezos: Warning to small investors

But earlier this month, shares in the troubled net retailer surged more than 20% on Wall Street following rumours of a possible tie-up with Wal-Mart, the world's largest retailer.

The share rally was sparked by a story in London's Sunday Times newspaper, which suggested the two were considering a "strategic alliance".

According to the Sunday Times, Mr Bezos, and Lee Scott, Wal-Mart's chief executive, were hammering out a deal that would be announced in less than six months.

Both companies refused to comment on the story at the time.

This week's Money Programme will be broadcast on Wednesday at 1930GMT on BBC Two.