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

To: Glenn D. Rudolph who wrote (21150)	10/11/1998 5:16:00 PM
From: OtherChap	Read Replies (1) \| Respond to of 164684

>I have noticed the decrease too. I am wondering if they are waiting >to be closer to Christmas or are changing their strategy. The answer is simple. Up until recently, most net companies were writing off advertising expenditures of any sorts as "research and development" or even worse as "one time non-recurring charges." Well, recently Excite was brought to task for trying to pull that sort of stunt with a marketing agreement they made with netscape, and since then everyone has had to clean up their books. Expenses are unfortunately shown on the bottom line (unfortunate for longs). A couple weeks ago AOL had to restate their earnings because they tried to pull the same stunt, writing off an aquisition of Mirabilis as a research and development charge. The SEC wouldn't let them get away with it. Very likely Amazon realizes that not only can they NOT get away with writing off Junglee/Planetall aquisitions (as they intended to do) they can't even write their advertising off anymore. All this has happened in this quarter, which is why analysts are hurrying to answer Amazons pleas to lower estimates, even as late as THIS WEEKEND. What- you say analysts dont listen to requests like that? Read August's MSDW report from Mary Meeker where she describes Amazon as wanting her firm to lower estimates even more than they already had. Mary even brags about her pattern of always setting the estimates for AOL lower than they should be, in order to help them beat estimates consistently. She referred to Amazon's new super-lowered estimates as "swinging for the fences." There is a good chance that Amazon could have horrible results, but as Bezos knows full well- if "public" estimates have been lowered, he legally does not have to issue an earnings warning, since technically there is no "surprise". (which is the basis of many shareholder lawsuits) Bezos will do anything to avoid issuing an earnings warning- I am sure he called in every favor he had to get the analysts to lower their estimates this late in the quarter. It is not usually considered good form for brokerages to do such things. Amazon is up against the ropes- their only currency is their stock, and when that value deflates all they have is about 5 quarters of junk bond debt to spend. (because nobody is going to buy a secondary, especailly after their stock collapses) All in all, Bezos is probably still grinning, because I would bet every penny I own that he hedged his position somewhere above 100. The guy was a former hedge fund manager, for chrissake! It's perfectly legal- you think he wouldnt take advantage of the chance? Get real. He, along with Vinik, are smart guys. The only question is whether or not they can get out alive before the pyramid scheme can't find any more "greater fools" to buy the stock.