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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: R. Resendes who wrote (40699)	2/17/1999 7:24:00 PM
From: Sarmad Y. Hermiz	Read Replies (1) of 164684

R.R. Someone on this thread wrote a long post showing how amzn has never been able to use funds in a way traditional firms do. To restate their note, usually you borrow and deploy money to get a positive return on the new funds. So if amzn spends $5M that costs 5%, they should realize a return greater than the cost of funds. In this case it seems to me that the investment is in a firm that is probably out of money. cannot pay rent and cannot pay employee salaries. Amzn comes to the rescue. What increase in cash flow will amzn realize as a result of this investment ? Also this move belies any pretense that amzn can reduce development costs. These new people will cost at least $4M/yr. Also amzn has hired many new people lately. So how will their costs decrease ? -Sarmad

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