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

AMZN 229.12

-0.2%

Nov 26 3:59 PM EST

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To: Lizzie Tudor who wrote (38296)	2/5/1999 6:26:00 PM
From: Glenn D. Rudolph	Read Replies (1) of 164684

Are you implying that B&N has accelerating mktshare vs. Amazon? Not from what Ive read. Michelle, Actually, BKS has increased market share relative to AMZN. Please not they have not increased sales as fast as AMZN. BKS is starting from a smaller base. I do not believe the market share issue is what really matters regardless. It is margins. AMZn has lately been stating that margins do not matter. This is another form of flawed accounting but as margins dropped, they had to come up with something. There is a simple concept in retailing. Gross margins must exceed all expenses or the company will have a loss. There is no getting around that. Total gross mragins, not as a percentage, are increasing with volume but not as quickly as are expenses. This is the key and when AMZN can show they can increase gross sales with some gross margin and keep expenses fixed, I will change my opinion on the future. I am still "perfect" on my fundamental analysis of AMZN. I did not anticipate the equity markets throwing another $1.2 billion at them but AMZN knows how to burn that cash fast. Glenn

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