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

To: The Freshmaker who wrote (42417)	2/25/1999 7:39:00 AM
From: MoonBrother	Read Replies (1) \| Respond to of 164684

Famous I-net analyst Keith Banjamin's Latest Comment on AMZN's move into new products. He believes that AMZN should move on this news today! Enjoy! --------------------------- 01:46am EST 25-Feb-99 BancBoston Robertson Stephens (Benjamin, Keith 415-693-3 AMZN: Finally the Next ProductDrugs. February 25, 1999 A M A Z O N . C O M , I N C . Finally the Next Product...Drugs. Keith E. Benjamin, CFA (415) 693-3285 keith_benjamin@rsco.com Lauren Cooks Levitan (415) 693-3309 lauren_cooks_levitan@rsco.com BancBoston Robertson Stephens BancBoston Robertson Stephens AMAZON.COM, Inc. AMZN $110 15/16 2/25/99 Industry: E-Tailing CHANGE IN... YES/NO WAS IS Keith E. Benjamin, CFA 415 693-3285 Rating: No BUY Lauren Cooks Levitan 415 693-3309 EPS 1998A: ($0.50) EPS 1999E: No ($0.93) FY Dec 1998A 1999E 2000E EPS 2000E: No ($0.22) EPS: 1Q ($0.07) ($0.29) 52-Week Range: $199-10 2Q ($0.12) ($0.28) Shares Outstanding(MM) 175.1 3Q ($0.16) ($0.24) Market Cap ($MM) $19,423 4Q ($0.14) ($0.12) Avg Daily Trading Vol (000) 5212 Year ($0.50) ($0.93) ($0.22) 12/98 Bk Value/Sh, pf $0.79 P/E NM NM NM 12/98 Tot Debt/Tot Cap, pf 71% Cal Yr ($0.50) ($0.93) ($0.22) C1998E ROAE NM CalYr P/E NM NM NM Price/Book Value: 140.0x Revs ($M) 1998A 1999E 2000E Net Cash/Sh $0.14 1Q $87.4 $260.0 Div/Yld: NA 2Q $116.0 $271.7 3-Yr Sec Growth Rate: 50% 3Q $153.7 $284.0 4Q $252.9 $375.2 Year $610.0 $1,190.9 $1,561.8 Mkt Cap/Revs: 31.8x 16.3x 12.4x 1998/1999/2000 EPS exclude amortization of intangibles; adjusted for 3-for-1 split effective 1/5/99 Net cash includes $373.4M in cash and $348.1M in debt. Key Points: Amazon.com announced yesterday it holds a 46% minority stake in Drugstore.com, Amazon's first move into the consumables product category. We believe this investment demonstrates Amazon's ability to secure prime new tenants. We believe the announcement points to a big opportunity for Amazon to generate lead-fee revenues and shows the potential profitability of Amazon's business model. We are excited about this investment and believe the growth potential for on-line sales of consumable products is tremendous. ** We believe this investment is a signal that Amazon is evolving into a retail portal and the company can grow into its current valuation. Thus, we are maintaining our estimates and current valuation. SUMMARY: Amazon.com announced yesterday it holds a 46% minority stake in Drugstore.com, Amazon's first move into the consumables product category. Drugstore.com plans to begin selling brand-name personal healthcare products on its Web site today. The e-tailing startup is headed by former Microsoft Corp. on-line executive Peter Neupert and has financial backing from Kleiner Perkins Caufield & Byers, which also has a stake in Amazon.com. We estimate the on-line market for drugs, vitamins, and health and beauty products is worth $150 billion annually. Amazon's Web site will feature a link to www.drugstore.com on its homepage. In addition, CEO Jeff Bezos will serve on the Drugstore.com board of directors. IMPACT ON BUSINESS: We believe this investment demonstrates Amazon's ability to secure prime new tenants. Not only has Amazon's investment satisfied our thirst for a new product category, but it signals the company's presence on the Web and ability to leverage its brand, reach, and strong balance sheet to attract the Internet's next wave of e-tailing category killers. We believe that in certain e-tailing product categories, other companies will have the advantage of being the first brand and first mover in the space, but still need Amazon for its ability to instantly provide a large loyal and active customer base comfortable with on-line shopping. While payment terms were not disclosed, we expect Amazon to receive revenues for each lead its Web site provides to Drugstore.com. We believe the announcement points to a big opportunity for Amazon to generate lead-fee revenues and shows the potential profitability of Amazon's business model. We are excited about this investment and believe the growth potential for on- line sales of consumable products is tremendous. We refer you to prior e- tailing and Internet updates where we discussed new product categories that have yet to gain traction on-line. We believe consumable products will be one of this year's hottest new e-tailing categories and have high expectations for first-movers into this area. We would not be surprised if Amazon makes additional investments in e-tailing startups similar to the one announced with Drugstore.com. Amazon's stock, combined with its current cash position, affords the company considerable freedom to make strategic investments, in our opinion. INVESTMENT IMPACT: We are excited about the announcement and believe this is a good investment for Amazon. We expect the stock could move on this news since it points towards Amazon's increasing reach into several on-line shopping product categories. We believe this investment is a signal that Amazon is evolving into a retail portal and the company can grow into its current valuation. Thus, we are maintaining our estimates and current valuation. THE COMPANY: Amazon.com, Inc. is a leading on-line provider of books and music CDs via its Web site, Amazon.com. Amazon.com has established itself as a well- known Internet brand. The company currently offers more than 4.7 million books, music CDs, videos, DVDs, computer games, and other titles at competitive prices. Amazon.com's marketing focuses on its ability to allow browsing and buying of a much greater quantity of books and other media than could be shown in the largest book and related retail stores. Amazon.com's growing popularity seems more a function of the convenience of on-line shopping, in our view. We believe Amazon.com will try to exploit its growing base of loyal buyers through expansion of its Web site and product offerings. INVESTMENT THESIS: WE BELIEVE AMAZON.COM IS WELL POSITIONED TO TAKE ADVANTAGE OF THE INTERNET AS A NEW MEDIUM FOR MARKETING AND COMMERCE. WE BELIEVE THE COMPANY HAS ALREADY ESTABLISHED ITSELF AS ONE OF THE FIRST, LEADING ON-LINE MERCHANTS. INVESTMENT RISKS: Among the risks are (1) the rapidly emerging market with no earnings validation of the Internet as an effective commerce medium; (2) an extremely competitive landscape, including other on-line bookstores and new entrants and on-line service companies; (3) competitive price pressure; (4) inventory risks associated with new strategy of buying directly from publishers and maintaining increased physical inventory in warehouses; (5) significant payments for placement leading Web networks; and (6) probability of significant losses for at least the next few years.

To: The Freshmaker who wrote (42417)	2/25/1999 11:24:00 AM
From: Rob S.	Read Replies (1) \| Respond to of 164684

Amazon is continuing to peg up against the resistance level at 120. Despite the DrugStore.com news and rah-rah recommendations from analysts, an event that would have caused this stock to skyrocket 30% or more just a couple of months ago, Amazon fails to gain momentum beyond the expected technical rebound. Volume remains modest despite the hype factor. Still, the DrugStore.com acquisition makes sense for Amazongonenutty.com - they must diversify into more protectable sectors or they will be relegated to razor thin margins that will become indicative of commodity Internet sales. ANALS refuse to acknowledge this already apparent trend toward severe Internet price competition. Basking in the sun or rapid growth, these fish mongers hawk the high priced catch of the day. Before the fourth chapter is written, this fish story will start to smell. Within two years, the stench will be unbearable! There will be a time to buy the net stocks for another ride up - it just isn't the time now unless you are fortunate enough to participate in over-subscribed IPOs and newly discovered issues that are still reasonably priced. Go Amazongonenutty.com!!! Upward to 125!!!