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

To: Tom D who wrote (3604)	4/28/1998 7:40:00 PM
From: taxikid	Read Replies (1) \| Respond to of 164684

amzn stock will split as i expected. finally adding some liquidity to the outstanding stock..this will ease the squeeze so to speak.. but of course all the wade cook fanatics will be buying and buying, regardless of the potential for loss... as amazon struggles for profitablity, its outstanding float will grow and and short interest will dissipate and ultimately the share price will level to a reasonable price. but the volatility here will crush those sthorts and some longs who buy the tops thinking it is going to double or whatever.. one of the key fundamentals in shorting( not day trade shorts) is liquidity.. ktel is a prime example of how a small float can push the share price to the moon. the covering is someone else's forced buy..and when someone has to buy, they have to pay a premium. i have no doubts that amazon will be volatile and make big winners out of those who play the game correctly.. the little guy will continue foot the traders bill with his losses. taxi

To: Tom D who wrote (3604)	4/28/1998 9:15:00 PM
From: Oeconomicus	Read Replies (1) \| Respond to of 164684

When revenues exceed these relatively fixed costs, profitability will follow. These fixed costs are the barrier to entry for competitors--the competitors can't grow revenues fast and far enough to survive. Tom, Econ 101. Remember? Amazon is the one at a disadvantage because they still can't cover their fixed costs, much less variable. Their bigger competitors (BKS, BGP, Bertelsmann, WalMart, etc., etc.) long ago reached the point where they cover fixed overhead costs. They can price off of the direct, marginal cost of selling a book over the Web (CGS, shipping, marginal cost of carrying the book in inventory). AMZN, OTOH, has all sorts of corporate expenses and distribution facilities to pay for PLUS the direct, variable costs. If they ever decide that turning a profit matters to shareholders and lenders, they will have to price off of average cost, not marginal cost. Forget whether AMZN will ever be able to purchase books as cheaply as the big guys - even if they reach that point, BKS, BGP et al will still be able to undercut them without sacrificing bottom line profits. And remember, as Ken used to remind us so often, BKS said that they would not sacrifice overall profitability to the Web. Perhaps they remembered their microeconomics classes from college. Regards, Bob