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

To: Candle stick who wrote (2564)	3/30/1998 10:40:00 PM
From: Barry Stewart	Read Replies (1) \| Respond to of 164684

AMZN to < $60 by mid-April IMHO.

To: Candle stick who wrote (2564)	3/30/1998 10:49:00 PM
From: Gary Korn	Respond to of 164684

More on the Series I, II and III Warrant Stock created pursuant to the $75,000,000 loan issue to AMZN on 12/23/97: Series I Warrant Stock is for 75,000 shares. Series II Warrant Stock is for 225,000 shares. Series III Warrant Stock is for 450,000 shares. If AMZN repays the $75MM in full by 12/23/98, no Warrant stock may be exercised (i.e., no dilution). If AMZN repays the $75MM in full by 3/23/99, Series I can be exercised, hence, 75,000 share dilution. Given losses expected for the "foreseeable future," I don't see how the loan could be repaid in this timeframe. If AMZN repays the $75MM in full by 6/23/99, Series I (75,000 shares) and 50% of Series II (112,500 shares) may be exercised. If AMZN repays the $75MM in full by 12/23/99, Series I (75,000) and Series II (225,000) shares may be exercised. If AMZN repays the $75MM in full by 6/23/2000, Series I (75,000), Series II (225,000) and 50% of Series III (225,000) may be exercised. If AMZN repays the $75MM in full after 6/23/2000, Series I, II and III Warrants (totalling 750,000 shares) all may be exercised. If AMZN fails to repay the $75MM in full by 12/23/2000, it will be in default. Therefore, it has less than 33 months to start making some serious money, instead of serious losses. Absent operating income, the only real alternative to pay off the loan will be dilution to generate cash. Gary Korn

To: Candle stick who wrote (2564)	3/31/1998 12:19:00 AM
From: Gary Korn	Respond to of 164684

On further review, the 750,000 shares of Warrant stock would not, if distributed, be totally dilutive, as the exercise price is set at $52.11 per share. Also, if the stock price is below $52.11 at the time of permissible exercise, the warrants might not be exercised at all. Gary Korn

To: Candle stick who wrote (2564)	3/31/1998 3:10:00 AM
From: Bilow	Read Replies (1) \| Respond to of 164684

Hi Candle stick; Funny thing, BKS sells more than 50% more in its 4Q than it does in the regular quarters. If you adjust AMZN's figures accordingly, their 4Q sales are not impressively larger than 3Q. This would indicate that their growth in terms of increase in sales per quarter (absolute value) has peaked. With most models of growth, this would indicate that they have about half filled their niche. Before I hear any comparisons with MSFT, please note that MSFT's growth rate in terms of sales per quarter has always been stellar, its the growth rate in terms of per cent gain that is faltering. But another fascinating thing to dredge out of the AMZN filing today is what is happening to their gross margins. They've been growing the business, getting efficiencies of scale, supposedly, so their margins should be expanding, right? Here are the figures: 1997 % CHANGE 1996 % CHANGE 1995 ------- -------- ------ -------- ------- (IN THOUSANDS) Gross profit.............................. $28,813 733% $3,459 3,291% $ 102 Gross margin.............................. 19.5% 22.0% 20.0% The Company's gross margin decreased due to a combination of lower prices and lower overall shipping margins, partially offset by improvements in product cost. The worst part, is that simultaneously, BKS has pretty much continuously increased their margins for years: Period BKS AMZN Ratio 1Q96 .345 .206 1.675 2Q96 .351 .214 1.640 3Q96 .359 .218 1.647 4Q96 .372 .223 1.668 1Q97 .348 .203 1.714 2Q97 .355 .187 1.898 3Q97 .368 .189 1.947 4Q97 .383 .195 1.964 Pretty clear, BKS just keeps making more money, AMZN just keeps letting more slip through their fingers. -- Carl