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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 233.95+0.3%3:59 PM EST
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To: schrodingers_cat who wrote (105534)6/27/2000 12:41:00 PM
From: Eggolas Moria  Read Replies (1) of 164684
 
The straw that broke the camel's back . . .

I also didn't quite see the problem with Meeker's comments. She indicated some risk to her 2Q revenue forecast. But Blodgett already had a lower 2Q revenue forecast than her published one. Lehman's questions about credit quality have been stated numerous times. To some extent, it's a question of belief.

Do you believe that AMZN will be more efficient six months from now than they were last year when they emphasized growth. They won't be spending cash on discretionary investments this year after spending $300 million last year.

I don't know the answer. The bulls don't believe that AMZN will be forced to raise cash next year and that the company will burn through at most another $500 million before it turns cash flow positive. The bears . . . well, they agree with that assessment and Lehman's report had them smiling.

The real problem in my opinion is that AMZN is transitioning from a revenue growth model to an eventual (if successful) cash flow model. During that process, it is quite often the case that revenue growth lags previous estimates. The momentum investors run and the valuation oriented ones wait.

It is usually a painful process to watch the ownership of a stock change in these circumstances.
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