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To: Glenn D. Rudolph who wrote (23125)	10/26/1998 9:35:00 PM
From: SilverAG	Read Replies (2) \| Respond to of 164684

Goodwill adjustments Glenn thanks for the informative posts again. Note (c) grabbed my attention- <<The goodwill and substantially all other purchased intangible assets will be amortized on a straight line basis over approximately 3 years>> From your post #23127 goodwill from the Junglee transaction looks like $176.982 million which will be spread out over 3 years, about $15 million a quarter. Is this new news or was this already expected? Did analysts expect them to book the whole Junglee deal at a loss this quarter much like XCIT tried to do with the Netscape deal? Also, why have adjustments been made to the 1997 statements? Didn't the acquisition happen this year?

To: Glenn D. Rudolph who wrote (23125)	10/27/1998 1:41:00 AM
From: SilverAG	Read Replies (2) \| Respond to of 164684

I see many similarities between AMZN & XCIT's restatement of earnings. XCIT made a $70 million deal with Netscape and tried to write the whole thing off at a loss. They almost got away with it but the SEC sniffed them out and forced XCIT to amortize the deal resulting in an unexpected .15/share earnings charge over a 2 year period. This news came to light on the day XCIT released this quarter's earnings. So what happened? People were puzzled when the numbers came out. On one hand, XCIT made a .02 profit, beating whisper numbers and breaking into the black for the first time. But on the other, on a GAAP basis, earnings were negative (.14). So which set of numbers was correct? Of course, the official GAAP numbers, the loss! How did investors react? Both bulls and bears thought they had won; the bulls crowed about their blow-out quarter while the bears snickered at the SEC crackdown. What happened to the stock? It went down after the announcement & the next day (this was when the DOW went ballistic over the rate cut). I believe that on Wednesday the same thing will happen when AMZN releases earnings. The SEC has forced them to amortize the Junglee acquisition over a 3 year period (it's nice of AMZN to restate 1997 figures already so they now only have two years to go). The adjustment will force them to show a non-cash charge of $15 million per quarter for the next 2 years!! That's shaving off a good .30 per quarter. So what's going to happen on Wednesday? I believe they will have to show two sets of numbers- diluted and non-diluted results. Which ones should investors pay attention to? Of course, the diluted numbers!! The company has to write off $15 million a quarter for the next 2 years!! They have already bought Junglee and the 2 million shares have already been issued, so you concentrate on the diluted earnings. The diluted EPS numbers are going to look BAD BAD BAD. 206.253.196.11 Already for the first six months of 1998, the diluted EPS loss is (1.35). With another (-.35) whisper number loss expected and another (.30) charge for the merger right-off AMZN will already be off (2.00) for the year on a diluted per share basis. Comments?

To: Glenn D. Rudolph who wrote (23125)	10/27/1998 9:39:00 PM
From: SilverAG	Read Replies (5) \| Respond to of 164684

The AMZN SEC filing made yesterday deserves another look. Message 6170805 Notice that the pro forma adjustment for the merger & acquisition related costs was $29.17 million for the first half of 1998 and $58.44 million for all of 1997. The SEC forced AMZN to amortize the Junglee acquisition on a straight line method over three years, resulting in a non-cash charge of $14.6 million/quarter that shows up in the merger and acquisition related costs line. Let's take a look at eBay's earnings announcement today: <<Net income for the current quarter was $663,000, or $0.02 per share on a fully diluted basis. eBay's net income before the effect of non-cash charges related to stock compensation and acquisition expenses was $2.0 million, or $0.05 per fully diluted share, compared with net income of $199,000 or $0.01 per fully diluted share during the third quarter of fiscal 1997. >> eBay wasn't allowed to report the operating EPS for the quarter, which was .05, they had to state the .02/share number to show the non-cash charges related to acquisition expenses. Tomorrow AMZN will also have to report the fully diluted EPS that INCLUDES the non-cash charge for the Junglee acquisition as the official EPS number. Will investors compare AMZN's operating EPS to analysts' estimates or will they compare AMZN's EPS that accounts for the charge to analysts' estimates? My guess is that they'll compare the EPS that includes the charge, as eBay's investors have done today. Anyone care to post a revised EPS figure that includes the Junglee charge?