Glenn,
Having been absence on this board for couple weeks, I've amazingly found out that somehow you've managed to be wrong every step with AMZN's move!!! You shorted AMZN when it was at $15 split-adjusted. and covered when it hit $190. You then bot long shares at $150(?) range, only to see it dropped to as low as $92. Somewhere in $100 ~ $110 range you sold your long shares, and went short again? Now that AMZN is hitting all cylinders and beats analysts' estimates on every aspect of the business. Looks like you're gonna lose your shorts all over again.
To me, yesterday's release may very well signal the beginning of AMZN's another round of powerful upturn toward $200 and beyond! Why? Here are my thoughts.
1) Loss significantly less analysts' estimates. AMZN's -14c loss has swept out analysts' worry. I've seen analysts making big deal on the potential losses. As silly as one analyst who made prediction of -21c as late as yesterday morning. Now that AMZN beats the consensus –18c handily. Keep in mind that 4c difference translates to 12c difference pre-split, i.e. AMZN would have posted only 42c loss vs analysts' 54c estimate!!!
2) Q1 will have sequential growth over Q498's skyrocketing rev. This is perhaps the best news we long investors can get from amazon's management yesterday! Analysts have predicted AMZN's price may drop based on the very likely downward Q1 rev after such a strong blowout Q498. But at this early stage, Amazon has already dared to predict that Q1 WILL be better than Q4!!! I have been telling you guys all along that AMZN's management has always been conservative in predicting the future growth. Apparently they must have seen significant backlog for Q1 that they are so confident to declare the sequential growth as early as in late Jan.
3) AMZN's 6.2mil customer and 1.7mil growth in Q4 have beaten even the most optimistic analyst's prediction. Its customer base has grown from 1.5mil in 12/97 to 6.2mil in 12/98. How much quicker and bigger can you ask AMZN to grow?
4) The loss/rev ratio has shrinked to just 7%. Contrary to many short sellers' claim, AMZN's loss has been continuing shrinking since about couple years ago. So called “the more they sell, the more they lose” is simply not true.
5) AMZN declared that their dot.com site has enjoyed the first profitable qtr ever in selling books! This is again beating analyst's estimate. I think this is another event that marks an important turning point on AMZN's growth history. This demonstrates that AMZN's book business can really be profitable. This in turn indicates that AMZN's overall business can and will be profitable later on.
6) The management's conservative comments, especially those made by CEO to recommend small investors/speculators not buying AMZN stock, has shown that the management is so confident that their business model will succeed in the long run. They want to concentrate on their business plans, i.e. expending big time in 1999 before everyone else catching up. To do so, obviously there will be expenses. The management wants to tell the Street up-front that they don't care that much about day-to-day stock fluctuation. They know that once their business model has succeeded and they've truly grown into a multi-billion company, the Street will treat it fairly.
All in all, we've seen the best qtrly report the company can put up to us yesterday!!! I think all the analysts are impressed, and we will see a whole slew of upgrades this morning! I will post some of them tonight. Stay tuned.
In short, I think AMZN's new round of upswing has started. Shorts will be squeezed heavily along the way, since we do have seen more "smart" guys jumped into bear camp lately. I can even imagine that with $10 ~ $15 pts initial gap up tomorrow morning, there will be more new shorts jumping in. With AMZN's continued upswing, these new shorts and old shorts will help AMZN going higher one wave after another, just like it did in the past couple months!!!
Shorts! Be aware!!!
MB
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