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

To: Jeff Jordan who wrote (1170)	1/11/1998 12:33:00 AM
From: Candle stick	Read Replies (1) \| Respond to of 164687

REASONS TO SELL SHORT AMZN (OR DUMP YOUR LONGS): 1) For starters at todays close AMZN was valued at about 1.3 billion dollars. Their sales last year were about 90 million. Compare this to Barnes and Noble(BKS) with a market capitalization of about 2.2 billion and sales of almost 2.5 billion dollars..... 2) There is enormous competition in the book market and contrary to what people think there are around 10 different sites on the internet to buy books, and Borders(BGP) will be coming online by yearend. 3) Because the superstores like BKS and BGP do so much more in sales, they can negotiate better bulk deals from publishers.....ie. their costs are lower for books, therefore they can underprice AMZN easily. 4) Only about 10% of America is online....a large part of those are minors....only adults with credit cards who are online can buy from AMZN. BKS and BGP have enormous superstores all over the country AND are online. They can sell to everyone, AMZN's market is severly limited to internet users. 5)The float in AMZN was 3 million shares when it came public. There was also 19.3 million shares held by insiders, that were "locked up" for 6 months. That lockup period is now over. That means that those shares can now be freely sold on the open market. Not to suggest that they will all come out at once, BUT there is so much profit in them that a large portion are sure to find their way into the float over the next few months. If nothing else it will be a huge overhang , causing a top for a long time. 6) It is very common for new issues to do this 'small float' initial offering and lock up the rest. That makes it much easier to hype up the stock since it is thin. Then the insiders sell their lockup shares at substantial profits. 7)The company has NO earnings. They are forcast to have large losses for 1998. There is a price war going on between the booksellers. I don't see how AMZN can compete, let alone turn a profit for at least 2 years. Therefore they must borrow to fund operations. Since they are an unproven new company, the cost of borrowing is substantially higher than BKS and BGP. 8) It is widely rumored that AMZN is preparing to do a secondary. They need to raise more money to stay afloat. This will further dilute your holdings. So, as you can see there are many resasons NOT to own AMZN. There are actually many more reasons but I will get them another time. Suffice it to say that there are enough reasons to sell it short. I believe AMZN will eventually trade all the way back down to the IPO price this year, somewhere between 10-20 dollars. Maybe even sooner if the market starts to scare out due to the Asian crises. Nervous shareholders will quickly dump the highflyers like AMZN to preserve profits, especially when they realize how quickly it can turn, such as todays 4 1/4 point drop. Best of luck to you,.....please consider these facts, but don't take my word on it, do the homework yourself............;^)