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

To: damniseedemons who wrote (38458)	2/6/1999 3:23:00 PM
From: KeepItSimple	Read Replies (1) \| Respond to of 164684

>current liabilities should be thought of as Assets. are you smoking crack? I think I'll go gamble in las vegas and go into debt to the casino for 20 million dollars. Then get a loan from the bank based on my "assets" of 20 million bucks. >And current assets are considered Liabilities. And when I file my taxes, I will consider that 20 million bucks I now have from the bank to be a liability. I'll invest that "liability" in money market funds and earn tax-free 5% because my current earnings are "negative"

To: damniseedemons who wrote (38458)	2/6/1999 6:22:00 PM
From: Glenn D. Rudolph	Read Replies (2) \| Respond to of 164684

The way this works from amazon's cash-oriented viewpoint: current liabilities should be thought of as Assets. And current assets are considered Liabilities. Sal, Are you stating you agree with this or just that Amazon is trying to make the public believe it? Your opinions are always welcome. That is their working capital advantage... they can have those current liabilities (accounts payable) and enjoy the Float for 52 days.. ..And their current assets (accounts receivable and inventory) will soon become cash--but is not cash just yet, which from their perspective is a liability. They never end up with a 52 day float since their turn takes atleast 15 days and is increasing in time. Their inventory turnover is reducing as revenues grow rather than increasing. The business model is failing completely. Every advantage that has been touted by Amazon management and the analysts are not working as planned. The requirement of needing to hold inventory is coming true. Margins are not increasing with economy of scale. In fact, they are decreasing but we are expected to consider that a plus. Net net, it's like Amazon gets a free 36-day bank loan! And the larger their revenues grow, the more gross dollars they'll have as float during that time period. My business generates a free bank loan too but I will lose money if I keep margins below the costs of operations. This has really become a game to keep the story going until fundamentals finally kick this firm into bankruptcy. They have only survied now due to their great ability to get the equity markets to throw them a lot of cash at low rates. This "free loan" due to the business model has not done one bit of good. In fact, it made the cost of goods sold higher and enough higher to way offset what one would have to pay the bank for a loan in interest for 36 days. It is time Amazon started carrying inventory, reduce turn to get more favorable cost on their goods or they will burn right through the $1.2 billion in a hurry too. Amazon has discovered this problem and are leasing a lot of wharehouse space to store the inventory. I must admit to finding this story of great interest. I have debated many people on this issue and am finding I have been right on the mark regarding what Amazon has to do to survive. I am surprised the analysts are still spewing this junk although they need to tout the firm. They are starting to look a bit stupid at this point. Less than a year ago, the analyst's consensus was that Amazon would turn a profit in the year 2000. Amazon certainly has not failed to deliver on revenue increases. Their growth rate is nothing short of almost perfect. It should be clear to anyone with a little retail business experience, that the original model was majorly flawed. Glenn