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

AMZN 233.23

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To: Tom D who wrote (3286)	4/22/1998 11:50:00 PM
From: Gary Korn	Read Replies (1) of 164684

Some guesstimates based on Mediamatrix figures. Assumptions: 1. 4Q97 sales were $66M 2. No xmas season effect (a very faulty assumption, but I want to give this some upside) (but see Assumption #5 below). 3. 4Q97 had 6.3% household penetration. 1Q98 had average pentration of 7% ((6.8 + 7.0 + 7.3)/3). 4. Thus, 1Q98 experienced an 11.1% household penetration increase over 4Q97. Assuming all of the extra penetration went to sales, an extra 11.1% over $66M sales would be an extra $7.3M sales, for a total of $66M + $7.3M = $73.3M 5. Alternative assumption: 1Q store visits generate 33% fewer sales than 4Q store visits (since there is no xmas). A 33% percent cut from what would otherwise have been $73.3M would translate to 1Q98 sales of about $50M, a 25% DECREASE from 4Q98. How would the Street react to 1Q98 sales of $73.3M, an 11% increase over 4Q? Remember, for the other booksellers, 1Q98 typically shows a 33% drop-off from 4Q (see below postscripts). How would the Street react to 1Q98 sales of just $50M, a 25% decrease? Gary Korn P.S. BKS had a 1Q sales decrease (from 4Q) of 33% last time. P.S. BGP had a 1Q sales decrease (from 4Q) of 36% last time.

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