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Technology Stocks : Amazon.com, Inc. (AMZN)
AMZN 230.27-0.6%3:59 PM EST
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To: Tom D who wrote (3669)4/29/1998 10:06:00 PM
From: Oeconomicus  Read Replies (1) of 164684
 
I don't see a problem with AMZN grabbing 20% of this market in 2003.

Tom, BKS and BGP together only had about 1/4 of the US book market last year (and that's assuming that all their revenues are from books). How can you seriously argue that one online bookseller, with no "land-based" revenue at all, will have almost as big a share in 2003 as the two leaders, with a couple thousand stores, have now. How do you arrive at this? Will AMZN have 100% of the Web's 20% of all book sales? 50% of 40%? Or will it be 20% of 100% with all brick and mortar stores being shut down? Get real.

By 2003, if AMZN is even still around (which depends as much on the terms of this debt deal as on their marketing genius), you'll be lucky to have a $2-3 billion revenue company operating in a handful of thin margin product lines. It will be burdened by the fast approaching $50mm+ annual interest payments and $100mm+ principal payments. And it won't be valued at 3 times sales - companies in such thin margin businesses don't get that kind of valuation (except in a mania of course). Oh, and whatever it's valued at in 2003, don't forget to subtract a half billion dollars to arrive at the equity value (if any).

BWDIK?
Bob
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