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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 229.10-1.4%Dec 4 3:59 PM EST
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To: Alomex who wrote (126150)6/8/2001 1:27:17 AM
From: Glenn D. Rudolph  Read Replies (1) of 164684
 
I believe Amazon will only survive after a debt renegotiation, perhaps a big swap of equity for debt. It is quite interesting that the biggest bull on AMZN is buying debt instead of stock....


Alomex,

Even the elimination of Amazon's debt would be of no help. The cost of fulfillment continues to exceed the gross margins. Amazon continues in an endless cycle of losses with no way out.

Amazon is doing a poor job in their fastest growing segment of electronics. They largest electronic players will not sell directly to Amazon and I do not see a reason for them to do so in the future. Two that come to mind is the "small" firm of Sony and then JVC. There is no incentive for either of these firms to sell directly. That would irriated their current sales channels which are significant and there is the risk of no payment from Amazon.

Amazon is still looking for experience retail talent. I doubt they will find any since their stock is not a good payment form at present and their cash position is really falling a part.

I know Amazon's management continues to state they are on track to have a "per forma" profit in Q4 2001. The real fact is they are on track to file for Chapter 11 this January or sooner.
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