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Strategies & Market Trends : AMAZON.COM RIDICULOUSLY OVERVALUED BY ANY MODEL (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: dumbmoney who wrote (68)	4/7/1998 2:47:00 PM
From: Candle stick	Respond to of 182

LETS RECAP AMZN FOR THE NEWCOMERS HERE:...... 1) AMZN is forecast to lose $1.28 for the '98 year and continues to lose money for the "forseeable future", as per the 10K recently filed> fe.freeedgar.com 2)The marketplace for online booksellers is becoming crowded. there are currently over 1,000 locations on the 'net that are booksellers, some bigger than AMZN and some just specialty shops. The biggest competition is from Barnes and Noble barnesandnoble.com and Bertelsman books.com as well as traditional retailers such as Wal mart wal-mart.com 3) There are now search engine sites available that will search 30-40 booksites and find the one with the lowest cost for your book. The best of these is acses.com AMZN is almost never the low cost seller. 4) Insiders began heavily selling the stock as of this February. They file 'form 144' to indicate that they are registering stock to be sold, and so far over 50 filings have been made. See them here: edgar-online.com. 5)Valuation. AMZN is trading with a market cap of over 2 billion dollars with just 140 million in sales and large losses. For a contrast BKS (Barnes and Noble) sells for 2.3 billion dollars with 2.7 BILLION in sales and is profitable. They have an almost identical website as AMZN and have about 1,200 stores that are profitable. On a price to sales basis AMZN is selling at almost 20 times the value of Barnes and Noble. 6)AMZN has no cash. they borrowed 75 million dollars last year to beef up the balance sheet, but they are paying very high interest rates on this and it will soon be gone due to the constant losses being generated. Conclusion: AMZN will be forced to dilute the stock by doing a secondary to raise cash to be able to continue operating. 7) You are paying 90$ today based on the projected earnings for the year 2001.....even if they meet projections the P/E will be astronomical if the stock just remains at 90...where is the upside? On the other hand, if they fall short, the stock can easily drop to 30-40 dollars. 8) There has been a large short position and a lot of hype surrounding the 'internet' stocks. The hype is over. There have been dozens of articles in the press indicating the overvalued bubble and frenzy that took place in the internet sector....down grades are coming, if for no other reason than valuations are too high. The short position pressure is being alleviated by insider selling adding to the float and the impending secondary that is necessary. 9)AMZN margins are declining as a price war between the new competition heats up. 10) If AMZN can not make a profit now when margins are high, how will they when margins have been squeezed by BKS, BGP, Bertelsmann, Cendant and the other who control the book market? Here are a few articles about AMZN from the recent press: cnnfn.com Message 3892165 cbs.marketwatch.com. forbes.com biz.yahoo.com