Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

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

To: Sarmad Y. Hermiz who wrote (44317)	3/6/1999 10:26:00 PM
From: Bill Harmond	Read Replies (4) \| Respond to of 164684

All I can say is that you are dwelling on the central issue. We have completely different projections of the outcome because I think that Amazon will emerge at the end of this spending spree as the still-dominant electronic retailing portal on earth. The Street was willing to give them four times as long as Amazon thinks is necessary to turn profitable, when they offered the $5 billion. Joy Covey herself said just last month that they recently recognized that the opportunity is far greater than they envisioned and will be spending even faster. Think about the scale of what's happening here. After the first bond offering Amazon tied up the international editions of Yahoo. You're fighting the tape. You're fighting the tide. Amazon is the clear, distant leader in an exploding industry. The company has been declared a core holding by the most influential investment houses on earth. Merrill replaced its analyst for being a cementhead with one of Amazon's most ardent bulls. That's alot to fight. You can short Amazon and have your small victories from time to time, but I think you're spinning your wheels and wasting your focus. You would be far better-off going long, then going fishing.

To: Sarmad Y. Hermiz who wrote (44317)	3/7/1999 9:58:00 AM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

>>I hope you're not basing your investment decisions on semantics. You can deduct expenses from your income. Advertising and promotion are expense items. Looks like the tax laws treat Amazon favorably compared to capital-intensive chain retailing. << The tax lawa are identical for Amazon and any other retailer. Losses are losses and profits are profits. If a retailer shows a profit but invests that profit into their company's infrastrure, they pax tax on that profit. The would be true with Amazon too but you do not see that because Amazaon has never seen a profit. Amazon is not losing money due to expanding their business. Amazon is losing money due to the simple concept they are selling products at a smaller gross margin than their expenses to obtain those products plus their costs of operations. This would be true even if they did not advertise. Look at the 10-K. Is shareholder equity from 98Q3 to 98Q4 increased or reduced ? These are not semantic losses. They are real, and there is no end in sight for the losses. At least according to company statements. This is worse than it appears also. The remaining shareholder equity is only goodwill and AMZN will tout that as they show the whopping 88 center per share ont their books. On the other hand, each quarter when numbers are released, Amazon and the analysts focus on "performa" numbers not the additional losses due to the amortization of the goodwill. Amazon and the analysts should be consistant. Either we ignore the goodwill (which they do for earnings stating for informational purposes only) and ignore goodwill in the bookvalue per share or we include goodwill in both numbers. Glenn