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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 249.43-1.8%Nov 4 3:59 PM EST
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To: Rob S. who wrote (68881)7/22/1999 1:19:00 PM
From: Bearded One  Read Replies (3) of 164684
 
But be careful in shorting this stock. They are preparing for Christmas sales and will likely pull out all stops to achieve large business volume - including more of the $5 and $10 give-away certificates, first-time buyer incentives, and $5 for $4 loss leader type sales specials. Sales will boom come Christmas but hoped for profits will be even further off.

I wonder if even a wild increase in revenues by itself can really whip up any frenzy. They've already shown an ability to increase revenues by selling things at a loss. A wild increase in revenues without a corresponding increase in losses might turn this stock around, but I just don't see how that can happen. Companies are entering the internet, not leaving, so Amazon is going to be under constant pricing pressure.

What I find amazing is that many investors just keep ignoring the fundamental syllogisms at work here: If one company finds it worthwhile to sell on the internet, then others will too. If one company finds it worthwhile to sell at a loss on the internet, then others will too. If one company which continually loses money gets valued at 20 billion dollars by selling at a loss on the internet, then other companies will find it worthwhile to sell at a loss on the internet, even if they only get valued at a 'few' billion dollars. Hence eternal competition and eternal pricing pressure from new directions.
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