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

To: llamaphlegm who wrote (22968)	10/25/1998 4:59:00 PM
From: OtherChap	Read Replies (1) \| Respond to of 164684

Consider, if you will, Amazon's purchase of Planetall and Junglee. Neither company carried anywhere near a rational purchase price- but at least Amazon used stock instead of cash. Now, the question is, why pay so much for these companies? Neither were a leader in their field, and had no viable products or revenues. But they did have two things: A) both had some cash in the bank due to recent venture capital investments. The companies were private so we do not know who these VC's are. Could be anyone. The SEC doesnt ask for this kind of info. B) new shares could be printed to buy these companies at literally no cost to Amazon. Now, here's the kicker- and what I think happened. (speculation only, but it does solve every question) Junglee and Planetall both had cash in the bank because it was recently "invested" there by various members of the silicon valley kieretsu. Anyone care to check out the background of these companies? How long had that cash been sitting in their bank accounts? Now, these keiretsu have 3 million shares- NOT to add to the float (which it did), but by contacting brokerages and doing behind the scenes: "i'm the client first in line for any amazon shares coming your way" That way the shares never even really get "sold." They immediately use these 3 million shares to use as margin in order to short (hedge) their existing Amazon positions. (hey, what a coincidence, 3 million shares x ~100 = 300 million dollars worth of hedging power- roughly the same amount of shares owned by Vinik and the other keiretsu players put together. Also, since they added 3 million shares by buying these two worthless companies, their loss estimates for this quarter will be "better" simply because of how negative earnings figures work. :) And, to top it all off- they get to take the cash in the bank accounts of junglee/planetall and add it to Amazon's cash on hand AND revenue figures, while of course writing off the actual purchase as research and development or a "one time charge." So basically, Amazon didn't care what companies they bought- they just had to find 3 million shares to throw to their keiretsu buddies. It could have been a dogfood manufacturing company, for all Amazon cared. (although it would have aroused suspicion) Comon, buying a shopping bot when everyone knows Amazon will immediately tinker with it to give them an advantage? I dont see myself using that product to base my shopping purchases with. :) However, for all I know this kind of activity could be perfectly legal. Sleazy, surely. And of course, it is just speculation based on my observations. FYI, I am currently long Amazon, because I feel these guys are going to succeed in pushing the price up further. They have this racket locked down perfectly. No reason to fight the scam- might as well join it.

To: llamaphlegm who wrote (22968)	10/25/1998 7:46:00 PM
From: Bill Harmond	Respond to of 164684

>>You're lack of ability to envision ANY future scenarios which are detrimental to the current leaders When you're as long as I am, trust me...