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

To: Michel Bera who wrote (10275)	7/14/1998 7:58:00 AM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

****OT*** Compaq's cheapest consumer PC most profitable -WSJ Reuters Story - July 14, 1998 04:19 %DPR %US CPQ V%REUTER P%RTR NEW YORK, July 14 (Reuters) - Compaq Computer Corp.'s cheapest computer is now its most profitable consumer personal computer, the Wall Street Journal reported Tuesday. Accelerating sales and a sharp drop in costs pushed the margin on Compaq's $899 computer, which is also its biggest seller, above its more expensive consumer PCs, Rod Schrock, vice president of Compaq's consumer division told the newspaper. "The big misconception is we make a lower gross margin in the sub-$1,000 market," Schrock said. "For the consumer business, those are the most profitable desktops." Schrock said the low-cost system took off this spring as huge sales and tight inventory controls allowed Houston-based Compaq to spend less on price guarantees to stores. He said Compaq is paying 42 percent less for home PC components now than it was a year ago, the paper reported.

To: Michel Bera who wrote (10275)	7/14/1998 11:01:00 AM
From: umbro	Read Replies (1) \| Respond to of 164684

Michael, Young companies from a new business cycle slaughtering old ones from previous times. Digital to IBM, then Compaq and PC business to Digital, etc. There is no way for the "old" ones to survive. I agree that tne newer companies have dynamics that make it difficult for the larger ones to follow. However, in the example you cite, above, it was IBM that innovated the PC. Unfortunately, IBM suffers from the "Xerox effect", showing the ability to innovate (at times), but not the ability to captiablize. Still, IBM stands today, and Digital has been absorbed by Compaq, so I'm not sure DEC is the best example. The main thing that bothers me about AMZN is its financial structure. Negative shareholder equity, and a huge junk bond overhang is seldom great for longer term returns on a stock. EPS estimates continue to be lowered on AMZN, and the analyst ratings are coming down as well. If that's the trend over the course of the next year/two, it won't be good for longer term investors in AMZN. You've mentioned that you're holding AMZN from the $48 level. Congratulations on your good timing, and your determination to hold this stock, even when it hit $140/share. My concern is for new investors, who may be buying at 100+ ... I think they're very late, and the odds are that they'll be sitting on a big loss in a year/two as the facts become clearer. In the meantime, AMZN is one heck of a trading stock, and creates some really interesting point and counterpoint discussions.