Amazon.com, Inc. (AMZN) Message Board

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

AMZN 233.22

+1.8%

Nov 28 9:30 AM EST

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To: Glenn D. Rudolph who wrote (143388)	6/26/2002 12:47:33 AM
From: Ted The Technician	Read Replies (2) of 164684

Inventory problems? COMS reported higher gross margins this quarter. If I heard correctly, the reason for the higher gross margins was because they sold inventory that was at one time written off (the cost of this inventory is zero). COMS expects its gross margins to drop next quarter as it will no longer have this zero-cost inventory benefit. AMZN's gross margins went up last quarter, but I don't know if it is because of it claimed any zero-cost inventory benefit. Analysts questioned the large overhead of options-related supply for COMS. There is a bunch at $6, $7.5, and $10. Likewise, AMZN has a large overhead of option-related supply. This info can be found in the footnotes of the 10k or proxy. I remember that there is a bunch of options with strike price around $18. It might have been this supply that kept AMZN from rising very far. The ironic thing with these huge option grants is that the higher the price of the stock rises, the more the company will lose (if it needs to go to the open market to buy the stock at a high price and resell it at the lower strike price).

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