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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 (23125)	10/27/1998 9:39:00 PM
From: SilverAG	Read Replies (5) of 164684

The AMZN SEC filing made yesterday deserves another look. Message 6170805 Notice that the pro forma adjustment for the merger & acquisition related costs was $29.17 million for the first half of 1998 and $58.44 million for all of 1997. The SEC forced AMZN to amortize the Junglee acquisition on a straight line method over three years, resulting in a non-cash charge of $14.6 million/quarter that shows up in the merger and acquisition related costs line. Let's take a look at eBay's earnings announcement today: <<Net income for the current quarter was $663,000, or $0.02 per share on a fully diluted basis. eBay's net income before the effect of non-cash charges related to stock compensation and acquisition expenses was $2.0 million, or $0.05 per fully diluted share, compared with net income of $199,000 or $0.01 per fully diluted share during the third quarter of fiscal 1997. >> eBay wasn't allowed to report the operating EPS for the quarter, which was .05, they had to state the .02/share number to show the non-cash charges related to acquisition expenses. Tomorrow AMZN will also have to report the fully diluted EPS that INCLUDES the non-cash charge for the Junglee acquisition as the official EPS number. Will investors compare AMZN's operating EPS to analysts' estimates or will they compare AMZN's EPS that accounts for the charge to analysts' estimates? My guess is that they'll compare the EPS that includes the charge, as eBay's investors have done today. Anyone care to post a revised EPS figure that includes the Junglee charge?

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