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

To: EliBenTedrus who wrote (10939)	7/20/1998 7:37:00 PM
From: Rob S.	Respond to of 164684

In the case of Amazon.com, "Bezo was handed a spread-sheet from his CFO showing that lower margins and debt service pressure were likely to further reduce the projected incomes in the outlying years forecast. Bill BigBucks, at Amazon's lead investment banker, advises that ". . . now is the time to strike while the irons hot, let us prepare a secondary offering. In the meantime, do everything you can to pump things up; increase the advertising level, announce new promotion programs, etc. so that we can show forward momentum when this week's results are reported." Bezo ponders the situation; On the one hand, the fervor for the stock has grown to monumental proportions which has also helped awareness of the brand name and sell-through at the site. On the other hand, he figures that his company's moment in the sun and relatively easy ride on the internet publicity bandwagon won't last forever. The 10% debt will impact earnings for several years just as competition is expected to heat up to squeeze margins. He is reminded by an article he just read today, zdnet.com : While turning those shoppers into buyers is one problem facing Web businesses, the information itself presents perhaps an equally serious difficulty because most searches, or the "bots" that scour multiple vendor sites, focus on side-by-side price comparisons. That's a prescription for only one winner - the low-cost leader. Bezo knows that many competitors loom on the horizon who have already paid down their huge infra-structure and inventory investments and are able to negotiate more favorable volume discounts. "Hmmm . . . maybe it's time for me to sell a couple million shares in the secondary . . ."