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

To: Alomex who wrote (132528)	10/4/2001 10:27:50 AM
From: H James Morris	Read Replies (2) \| Respond to of 164684

Any others? Sure, I got a list as long as my arm. How about yhoo and jdsu for a start? >E-tail giant Amazon.com is in an even more precarious situation. Less than two years ago, Amazon's market capitalization was about $35 billion. Retailers, from Kmart Corp. and Wal-Mart Stores Inc. on down to small neighborhood bookstores, worried that Amazon, which brashly proclaimed its desire to be the world's biggest store, would destroy their way of doing business. Now Amazon is fighting for its life, and its market value has declined to about $2.5 billion. Amazon's stock closed Wednesday at $6.76. But even that seemingly bargain-basement price has drawn virtually no interest, analysts say. Although Amazon boasts undeniable attributes, including a well-known brand and 20 million customers, six years of losing money have a way of destroying illusions. "There are no merchants big enough in the book industry or in the broader retail industry that would need to buy the company," said Michael Perkins, coauthor of "The Internet Bubble," which analyzed the retailer. One credible suitor might be Bertelsmann, which owns major American publishers and might benefit from operating Amazon's formidable distribution pipeline as well. "The question for Bertelsmann would be whether they'd want to take on all of Amazon's debt--$2 billion by the end of 2000 and $130 million in annual interest payments. . . . Or build up its own e-commerce infrastructure the way Wal-Mart has," Perkins said. If Amazon runs out of operating capital and is forced to file for bankruptcy protection--something analysts say is possible in a lengthy recession--Bertelsmann or anyone else could buy the carcass without assuming the debt. Even then, it's unclear how much assets like Amazon's customer list or brand name would be worth. "Dot-com brands have been shown to have no inherent value," said Jim Crawford, an analyst with Forrester Research. "At least, they don't in the absence of a profitable business model." Several other tech categories are littered with once-prominent companies now being forced out of business. latimes.com