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

To: The Reaper who wrote (116515)	1/30/2001 6:01:09 PM
From: Rob S.	Respond to of 164684

The only things you can believe are solid figures, which AMZN tends to leave out, and your own reasonable judgment. Nothing has changed the obvious trends: Amazon built business using "Money for Nothing Marketing" promotions and lavish advertising budgets. While that plus their early market entry got them mass market appeal and generated huge sales increases, analysts expectations that Amazon would be able to retain customers while generating higher margins has proven false. As Amazon has been forced to notch down their euphoric spending habits in an attempt to trim losses, it has only resulted in modestly lower losses than otherwise. It has also resulted in dramatically slowing sales, proving that their sales are highly "elastic": attract customer growth through give-aways (MFNM) and low prices versus generating higher margins at the sacrifice of sales growth. Somewhere in this equation is a "breakeven point": the point at which reducing promotion and other costs generates a breakeven in profits vs. losses. I have not figured out the breakeven point from a projection of past results but it now appears very clear that the best Amazon can hope for is sales much lower than anticipated and profit margins that are far shy of those needed to both pay off the huge debt, retain optioned employees, and secure a return for investors.