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

AMZN 236.68

-2.4%

Jan 14 3:59 PM EST

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To: Mark Fowler who wrote (4510)	5/19/1998 5:10:00 PM
From: Oeconomicus	Read Replies (2) of 164684

With a viable business model... Mark, part of any viable business model is an ability to demonstrate how and when the business will generate a return on invested capital. Another component is an analysis of the risks, including the threat that competitive pressures may squeeze margins and raise the revenue hurdle and extend the time required for reaching profitability. Considering the way companies spoon feed analysts these days with assumptions to use in their P&L models, the fact that everyone is saying "don't focus on profits" rather than "we anticipated stiff competition and, though breakeven is higher than originally planned, revenues are ahead of plan so all is well" should worry you. My guess is that competition is stiffer and margins thinner than they originally thought possible and they are struggling to come up with a new "business model" that will get them to profitability before they run out of money. Of course, while they try to make it work, why not go ahead and borrow piles of cash to buy more time to find the answer. After all, it's not real success, but rather the appearance of success that matters in this market. Bob

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