Amazon.com, Inc. (AMZN) Message Board

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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 224.41

-3.6%

3:17 PM EST

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To: Bearded One who wrote (95149)	2/28/2000 8:51:00 PM
From: dbblg	Read Replies (3) of 164684

Hi Bearded One, Couple of thoughts: Or do you really think that mail-order is a more profitable way of doing things than opening up a store? For lots of product classes, yes. Enough product classes to make a AMZN a compelling l-t buy even at the bottom of its trading range? Not for me, but I don't much like retail as a business. IMO the bullish analysts have used the WMT analogy less because of any similarities between the two companies than because WMT is one of the relatively small number of retailers to generate serious long-term wealth for its shareholders. Losing piles and piles of money every quarter leads to bankruptcy as soon as the investors wise up and stop lending/giving. It's that simple. Are you extrapolating the burn rate for the past year indefinitely into the future? If so, your estimates for AMZN's future sales are considerably more aggressive than most, as management has indicated they are essentially done with the U.S. warehouse buildout. Even if you are correct, predicting when "investors wise up and stop giving/lending" is rarely as simple as you suggest. I certainly would not have predicted that AMZN would be able to raise as much money on as generous terms as it has, just as a couple of decades ago people who didn't anticipate the broadening and deepening of the junk bond market thought MCI's business plan was absurd. Anyway, you'll probably do fine shorting AMZN here. At the end of the day, it is a retailer and we are heading into a series of tightenings. I'll be very surprised if AMZN blasts out of its trading range this year. That being said, I have to say that I'm having a hard time believing that AMZN is the best short in the retail sector. Surely there's a better return to be had with some cash-strapped regional chain which caters to Providian cardholders? Best of luck, Ganesh

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