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

To: Jay8088 who wrote (19491)	10/1/1998 4:33:00 PM
From: OtherChap	Read Replies (4) \| Respond to of 164684

Amazon & hedge fund collapse. Need I say more? Look, Amazon is going to have to restate earnings because they did something STOOPID. They bought a couple of worthless companies, Planetall and Junglee, for hundreds of times their actual worth. In past times, you could just write this off as research and development and sucker the investors. However, AOL recently tried the same stunt and the SEC told them "no chance" and AOL had to restate its earnings this week after a lengthy legal battle with the SEC. Amazon is not going to be able to write off these two aquisitions now, and this is going to DESTROY amzn's numbers for this quarter. They are going to warn on Friday after the close, I'm willing to bet. (and I have bet, HEAVILY) Now, about hedge funds- lets all remember what Jeff Bezos did for a living before starting this pyramid scheme. He was a hedge fund manager. He knows that those junk bonds would bankrupt the company in a few years when they come due, so I would not be surprised if he decided to put some of the "ipo/junk bond" cash to work in leveraged positions in order to a) increase "earnings" and b) make enough cash to pay back the debt when it comes due.. (that is, unless you assume he never intended to repay the debt and knew he would be cashed out and retired by the time that ugliness ever happened) Before you say "But Amazon would never invest their cash in risky hedge funds" just remember that tons of respectable companies DID invest capital in these funds. Why wouldn't one as disreputable as Amazon do it? Besides, we dont know WHAT they've been investing their cash wad in, because Amazon doesn't report that detail in their SEC filings. I agree with the earlier person- if the market is down again tomorrow and AMZN warns, we could see a closing price of 50. EASILY. Most of the big blue chip stocks have retreated 40% from their highs, yet Amazon was trying to set a new high as early as last week, even though they have never earned a dime and their loss estimates are being increased literally every week by analysts. Folks, GOD BLESS AMERICA!!