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

AMZN 234.70

-1.2%

Nov 14 3:59 PM EST

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To: llamaphlegm who wrote (11544)	7/23/1998 4:10:00 PM
From: Oeconomicus	Read Replies (3) of 164684

Thanks, LP. Until I got to the last paragraph, though, it seemed like routine Foolish hype. Then this: Amazon.com is sitting on a $340 million war chest that dwarfs the current resources of all of its major rivals, including Barnes & Noble and Borders What a load of crap! That $340 million is entirely borrowed money. Operations burn cash. It's not a war chest. It's a respirator. It keeps them alive until, they hope, they can breathe on their own one day. And, if you are going to count debt capacity in comparing competitive strengths, BKS has $491 million of undrawn availability under its bank lines not to mention $11 million in cash and operations that generated $22 million in EBITDA last quarter (the slowest quarter of the year). Who dwarfs whom? One is burning borrowed money to stay alive and the other has much greater amounts available to it, which it hasn't needed to use, plus cash flow with which to repay it if they ever do borrow. Bob

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