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Non-Tech : AMAZON TANK WATCH ( AMZN ) -- Ignore unavailable to you. Want to Upgrade?

To: Boddington who wrote (3)	10/25/2000 2:31:54 PM
From: StockDung	Respond to of 8

DJ IN THE MONEY:Amazon's Cash Status Not As Good As It Looks By Michael Rapoport A Dow Jones Newswires Column NEW YORK (Dow Jones)--When Amazon.com Inc. (AMZN) announced its third-quarter earnings Tuesday, it ballyhooed a cash position of $900 million. Pooh on all those critics who said the company was burning cash too rapidly, Amazon seemed to be saying; we're going to be fine. Read a jargon-filled footnote buried toward the end of Amazon's press release, however, and a different picture starts to suggest itself. Amazon says that during the third quarter, it "reclassified" $96.1 million of its investments as marketable securities. A large portion of that amount, the company said, was classified up till now as "investments in equity-method investees" - Amazon's stakes in dotcom losers like Pets.com Inc. (IPET), Drugstore.com Inc. (DSCM) and HomeGrocer.com Inc., now part of Webvan Group Inc. (WBVN). This isn't just an unexciting bookkeeping move. Amazon, like many other companies, counts "marketable securities" as part of its cash position. What Amazon appears to be doing is taking equity investments that have performed dismally - some of them have sunk to a buck or two per share - and saying, "Guess what? Now they're part of our cash position!" This move implies, first, that Amazon might soon unload some of those investments in other dotcoms - the company itself defines marketable securities as those it doesn't intend to hold for more than a year. But more importantly, it raises the question how strong Amazon's cash position really is. Ninety-six-point-one million dollars, after all, is a good-sized chunk of $900 million - without it, Amazon's cash position would be just a bit over $800 million. Amazon had about $908 million in cash and marketable securities at the end of the second quarter, so a dip to $900 million isn't that significant; a dip to around $800 million might be. Stripping out those "reclassified" securities would presumably also lower the $1 billion cash position the company expects to have at the end of 2000, and the $700 million it expects to have at the end of the first quarter of 2001. Amazon didn't have any immediate comment. (MORE) DOW JONES NEWS 10-25-00 01:58 PM