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: llamaphlegm who wrote (10623)	7/16/1998 2:01:00 PM
From: Jan Crawley	Read Replies (1) \| Respond to of 164684

LP - I care. Ty

To: llamaphlegm who wrote (10623)	7/16/1998 4:19:00 PM
From: Rob S.	Read Replies (1) \| Respond to of 164684

What's up with the Amazon hype? I see two primary opposing forces driving the AMZN stock price; 1] The enthusiasm for the internet, recognition of Amazon.com as one of the innovators, rapid sales growth, associates program; the Amazon.com hype machine. This machine has rocketed the stock valuation past what can be based on projected earnings. v. 2] The growing realization that Amazon.com is not the creator of a new "virtual" reality of the business world and that increased competition, lower margins, and increased pressure to develop their own infra-structure will further erode the chances for large profits that investors anticipate. I think that Amazon may be able to fuel even further speculation when they announce new product initiatives and alliances. The attention of speculators does not seem to be focused yet on the realities of how the business will have to develop - the cost side of the equation. Rather, they are focused on the sales growth side of the picture. As long as the expense and competitive aspects of the business can be ignored, the stock may be able to rally even further, beng fueled by the headlong rush of cash into the internet companies. Amazon has enough cash, even though the net cash flow is negative, to continue to fund expansion at the current, inadequate level. The dilution caused by the Senior debt won't be a factor for quite a while. If the company avoids exposing details of plans to fund major warehouse and inventory that will be needed to expand further and improve margins, the need to do a dilutive secondary offering can be avoided for another nine months or so, IMO. So maybe this puppy can ride on the hopes of internet zombies who are chanting the mantra, grooowth . . . grooowth . . . grooowth. Until the company is forced by the need to establish the extensive facilities needed to support the vision. I think we may get another speculative leg up unless Amazon.com management issues statements to the effect that increased capitilaztion and dilution will be necessary in the near future. If they stress the sales growth numbers and are able to gloss over the increasing losses and how the company plans to deal with them in the future, then I don't count on speculators coming to their senses.