Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: JimieA who wrote (8020)	6/29/1998 4:43:00 PM
From: fedhead	Read Replies (2) \| Respond to of 164687

What about the fact that AMZN doesn't have to maintain the physical store like B&N and Borders have too. Doesn't that offset the higher cost Amazon incurs for its books. I agree AMZN might be temporarily ahead of itself but its going to be a lot higher 5 years from now. Anindo

To: JimieA who wrote (8020)	6/29/1998 6:04:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164687

Although I think that AMZN is hoping that the model will improve as they buy & inventory more of the fast moving books and increase volume of purchases. Jim, This would clearly help the gross margins. However, AMZN is then doing somewhat the same as the brick and mortar companies. Not exactly the same. It is a difficult balancing act. Tikme will tell on this one. Assuming net bond proceeds is $225M Losses of $85M in 1998 and $50M in 1999 it would still leave $90M left plus cash on hand at 3/31/98 of $117M Leaves $207M going into 2000. This is two years from now! Hmmm...looks to me like no cash problem! Jim, Cash on hand on March 31, 1998 was $116.82 million Accounts payable were $48.47 million (this includes accrued payroll, etc.) Bank loan was $76.52 million. Let's agree that bond proceeds was $225 million. They payed the bank loan and accounta payable with the cash on hand and that leaves a ($8.17 million.). Now we have $225 million - $8.17 million leaving $216.83 million. Losses of $85M in 1998 and $50M in 1999. These years have a total loss of $135 million. Now we have the $216.83 million-$135 million leaving a cash balance at the beginning of the year 2000 of $81.83 million not the $207 million you stated. There is a lot of speculation here. I do not belive an analyst has a clue of what the losses will be. I am not stating they would be greater or less than expectations but I doubt expectations are accurate. In either case, the $81.83 million starting in the year 2000 is not a lot of working capital. I just do not see a cash crunch. But I could be wrong :-( There may not be a cash crunch if losses do not exceed estimates and losses in the year 2000 do not exceed $81 million. There is still the problem of $500 million in junk bonds that need to eventually be paid. Glenn