Your vision is a bleeding company, losing money in spite of its intentions
William - your words, not mine.
Amazon has plenty of money on its balance sheet before this recent financing, and you're projecting expenses based on the company's massive distribution center buildout this past year.
As of 12/31/99, Amazon had $706.2 million in cash and marketable securities. On March 31, 1999 (after the $1.25 billion convertible offering), Amazon had $1.442 billion in cash and marketable securities. They used up $736.78 million in cash in 9 months. We don't know if the US distributions centers are all complete - nor do we know if they have been fully expensed. I believe it is safe to assume that they are neither complete nor fully expensed. It is difficult to estimate their future cash burn rate. But if it stays the same, or even decreases a little, the cash raised through their recent European bond offering will be gone in 12 months - this would be especially true if they invest in distribution centers in Europe (as I assume they are).
AOL lost $1 billion cumulatively before it turned a profit. Amazon's only half-way there.
Where do you get your data? Per Edgar 10k filings and financial statements posted on Amazon's web site, by the end of the fourth quarter of 1999, Amazon had total cumulative losses of $882 million. Here are the numbers:
Amazon Net Loss
1995: $303,000
1996: $6,246,000
1997: $31,020,000
1998: $124,546,000
1999: $719,968,000
Seeing that we are almost halfway through the first quarter of 2000, Amazon may already be at $1 billion in total cumulative losses at this point. Yet, profitability is nowhere in sight.
Thanks,
-Eric |
