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

To: zebraspot who wrote (6950)	6/21/1998 9:13:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

Another TMF post: "Subject: a good balance sheet? Date: Sun, Jun 21, 1998 6:32 AM From: SchuCPA Message-id: <1998062110325601.GAA23349@ladder01.news.aol.com> Well, here is where you get to receive a comment from someone who does this for a living outside of the brokerage business or equity markets. I'm an CPA who has worked almost exclusively on Public companies from a consulting and guidance standpoint my entire carreer. I can't profess to be and expert by any stretch of the imagination, nor do I have a crystal ball. However, with my ability to read financial statements filed with the SEC and I can sort through some of the B.S. (that's bull stuff) a little faster and more acurately and hopefully gain a little insight from interpretations of past historical information. Here are some of my observations. 1. this company is obviously encountering growing pains. 2. This company has way more cash on hand than it should if it were really making a run for the roses. 3. Non of this cash on hand has been generated from cash flows. (unless you call all cash fungible) 4. This company operates on a less than 25% operating margin. At this rate, after all the marketing and selling expenses and all of the other SG&A expenses, their is nothing left over for the stock holder. So, it's value is esentially what it was from day one or less. 5. at this rate, they are going to have to take away profits from the big boys. They have cut themselves to the bone so much, how will they do that? 6. Whoever loaned them the 275 million recently (see the 8-K filed with the SEC) is definately banking on the far ahead future. 7. A basic principle of business. You can be the best advertiser in the game, but if you run out of stock on your store shelf, then how do you compete? 8. Where is this company's inventory supply? 9. My father is in the age group that reads the most. (upper 50's) He is just computer literate enough to surf the web a little. In addition, he lives in a small town that doesn't have access to AOL. As such, you would think that he would only know about Amazon.com and not the competition. He loves the Barnes and Noble site. He says it's delivery time is much faster and they have been able to beat Amazon on price and selection. Well, we are still in the infancy stages of this company and they are already being upstaged by the new litter of pups. I used to think that Amazon.com had the vision of a fortune teller. Maybe they still do and we just don't know it. However, from a financial standpoint, they should have tried to sell out a long time ago. Maybe they are just to expensive to sell now. No one wants to buy an overpriced company. They seem to be stuck in an enviable and unenviable position. No one wants to marry them do to the cost ( I always heard of them as the high maintenance girls. You know the ones. The ones that were spoiled by daddy so much that no boy wanted to marry them because he'd never be able to afford their lifestyle. I'm not shovanist, this can be true in reverse also.) and they are also about to get pummled by the bully/bullies on the playground they just walked onto. The only thing keeping this stock going is the short squeeze play going on. If I were all of you shorters out there, I'd go populate some of the competitions folders. (maybe BKS or Borders or one of the music vendors) Those guys have great balance sheets, cash flow statements and income statements. This is even true of the latest quarter. If I were one of the other big boys, here's what I would do. I'd ally with Amazon.com. Loan them the money now with the option to convert to stock at the option of the holder, tell amazon you will supply them in foreign markets with books. Then, wait for the price to fall a few years from now and own most of the company. This way, you have effectively bought out their marketing contracts and used them as a vehicle into someone elses playgound. You know, the one with no bullies. It might even be Gilligan's Island. Have fun now. "