Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: Bearded One who wrote (95149)	2/28/2000 8:51:00 PM
From: dbblg	Read Replies (3) \| Respond to of 164684

Hi Bearded One, Couple of thoughts: Or do you really think that mail-order is a more profitable way of doing things than opening up a store? For lots of product classes, yes. Enough product classes to make a AMZN a compelling l-t buy even at the bottom of its trading range? Not for me, but I don't much like retail as a business. IMO the bullish analysts have used the WMT analogy less because of any similarities between the two companies than because WMT is one of the relatively small number of retailers to generate serious long-term wealth for its shareholders. Losing piles and piles of money every quarter leads to bankruptcy as soon as the investors wise up and stop lending/giving. It's that simple. Are you extrapolating the burn rate for the past year indefinitely into the future? If so, your estimates for AMZN's future sales are considerably more aggressive than most, as management has indicated they are essentially done with the U.S. warehouse buildout. Even if you are correct, predicting when "investors wise up and stop giving/lending" is rarely as simple as you suggest. I certainly would not have predicted that AMZN would be able to raise as much money on as generous terms as it has, just as a couple of decades ago people who didn't anticipate the broadening and deepening of the junk bond market thought MCI's business plan was absurd. Anyway, you'll probably do fine shorting AMZN here. At the end of the day, it is a retailer and we are heading into a series of tightenings. I'll be very surprised if AMZN blasts out of its trading range this year. That being said, I have to say that I'm having a hard time believing that AMZN is the best short in the retail sector. Surely there's a better return to be had with some cash-strapped regional chain which caters to Providian cardholders? Best of luck, Ganesh

To: Bearded One who wrote (95149)	2/28/2000 9:00:00 PM
From: Wizard	Read Replies (1) \| Respond to of 164684

>>Or do you really think that mail-order is a more profitable way of doing things than opening up a store? That is a very narrow, unrealistic viewpoint on what Amazon.com can be... Providing internet access was/is low margin and was quite unprofitable for AOL until it reached scale and then it became a decent, but not a great, business. But AOL isn't worth what it is because of its access business, its because of the strategic position the company gained by first grabbing the audience through its low margin service. Amazon might have something similar going on. Its a shopping portal right now but who knows how different the model will be through the next 3-5 years of evolution. >>One of my criteria for selecting shorts is monitoring chat boards. When people start talking about how smart the leadership of a company is, it's usually a signal that the company is going to have problems. Oh, because its worked so well for Yahoo, AOL and Ebay... That is the laziest piece of BS analysis I have heard in a while. You ought to email that morsel to Barron's so they can run yet another article on how Amazon is such a terrible company although their customers love them. Just don't forget to include the fact that they grew non-US book revenue 200% sequentially last quarter. >>my frame of mind as you put it. My 'frame of mind' comment had to do with being imaginative of what a company might be capable of instead of focusing on whether they made money in 1999. I am quite pleased to see you can do ok with your investment results while being so steadfastly bearish on a model that is really quite revolutionary.