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

To: MR. PANAMA (I am a PLAYER) who wrote (3486)	4/27/1998 10:37:00 PM
From: Sean T. Kim	Respond to of 164684

Sales have more than doubled over the last two quarters (acutally about 130%) while EPS is generally flat (actually down 8%). What does this say? These top line gains they love to emphasize in their press releases are coming at a very heavy price. The marketing cost to get this growth has been enormous. So what happens when they dial down the noize? They obviously hope that once acquired into the Amazon "community", their customers will become repeat buyers without further prodding in the form of discounting, advertising, and promotions. Since they have yet to grow the topline faster than they are spending, it doesn't look like it is occurring so far. Once they stop burning money, it seems unlikely that you will see sales growth anywhere near these levels. It's a huge freaking gamble on whether they, or any online retailer for that matter, can convince enough people to remain part of their "community" while most book shoppers are driven by price. More likely is that they do eventually turn profitable but at the cost of lower sales volumes on very thin margins. And is that worth $80 a share?