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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 226.19-1.8%Dec 12 9:30 AM EST
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To: John May who wrote (905)12/2/1997 12:21:00 AM
From: Don Westermeyer   of 164684
 
John,

I actually think AMZN is the best bookseller on the internet. I think I am right about the margins being bad though, especially compared with the 'high tech' sector this company is associated with.

I would guess the best case margin would ever get is about 5%. I think BKS is even less than that (about 2%) and they get substantially better deals than most bookstores (I'm just shooting-from-the-hip with this number and could be completly wrong).

I agree, BKS etc. are sucking wind right now. I'm on record having a terrible opinion of BKS web interface. That doesn't really mean anything yet. As a percentage of their business the internet sector is still quite minimal. This will change as the internet grows. I just can't believe BKS, Borders, etc. will just sit by and watch the market be taken by a small upstart.

I already have a position short in the stock and probably won't cover until the fundementals come more in line with BKS, etc. The stock price would have to be under $20 for that to happen right now.

The only things really holding the stock at these levels are momentum, a small float, and exuberance in the market where earnings are meaningless.

I've seen this exact hype with EGRP and ONSL (internet leaders in commerce, etc.) and watched the stocks crash when reality sets in. Eventually the float will increase and competition will be realized and the stock will crash, IMO of course. :)
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