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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 229.12-0.2%3:59 PM EST
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To: Bill Harmond who wrote (122114)3/30/2001 1:58:59 AM
From: Glenn D. Rudolph  Read Replies (1) of 164684
 
With what we know I agree. I believe (because of their unrivaled front end) that they will sucessfully leverage that investment over time, though, and that's where we differ.


I understand your point. Amazon has been able to create one of the best if not the best on-line buying site around. You and I differ in the aspect that I believe the value of that front end is not enough to service the debt and the number of distribution centers. I expect the debt to be removed with a filing of Chapter 11 and some of the excess DCs. Then Amazon will still exits providing a good front end and of course, some distribution.

I am a believer in the long term prospects of e-commerce for many products. I am also a believe that dual channel is required for most products. Some exceptions are media products such as books, video and music. I wish Amazon had stuck with those because I would not have been stupid enough to short them. The added lines and excessive discounting made be believe the fundamentals would bring the stock down and that did not happen soon enough. Amazon really had a decent model going when they sold books, then added mucic and finally video using to DCs on on the east side of the US and one on the west side. Entering foreign markets was not a bad idea either if they just would have stuck with their forte.
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