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

To: Glenn D. Rudolph who wrote (44341)	3/7/1999 12:10:00 PM
From: Frost Byte	Read Replies (2) \| Respond to of 164684

Glenn, I have Morgan Stanley, Robertson Stephens, Bear Stearns, and Oppenheimer research right in front of me...here are some answers: 1) AMZN had POSITIVE OPERATING CASH FLOW of $31 million for the year of 1998. 2) AMZN's book business was indeed profitable in the 4th quarter. 3) According to Bear Stearns: "Dell Computer Corp and Amazon.com have very similar business models. Both companies sell low gross margin commodity goods, with a high level of inventory turns each quarter and a relatively small amount of capital investments required to increase the level of sales." 4) Customer acquisiion costs dropped to an all time low of $11 (Oppenheimer, 1/27/99, page 6). 5) Oppenheimer: "We continue to believe that aggressive investment is the best plan for the business - a plan that will lead to industry leading profitability, market share, and market capitalization. 6) Drugstore.com - I realize they own 46% of the company, but now AMZN receives lead generation fees from drugstore.com, thus increasing both revenues and margins...AMZN does not need to hold any inventory for this venture.....(Plus, drugstore.com will go public, giving AMZN another boost in market cap) Robertson Stephense - regarding drugstore.com - "We believe the announcement points to a big opportunity for Amazon to generate lead-fee revenues and show the potential profitability of Amazon's business model. We are excited about this investment and believe the growth potential for on-line sales of consumables is tremendous. "We believe this investment is a signal that Amazon is evolving into a retail portal." 7) Look at their full year 1998 numbers....Gross Profit was $133.5 million.....$132 million was spent on Marketing and Sales with the remaining costs totalling $63mm....If Amazon decided to cut out all Marketing and Sales expenses, they would be profitable...however, they are building a business and all analysts agree that spending right now is the way to go....... 8) Bezos and the team IS brilliant...trust me...I have spoken to the guy and know many in the VC circles that agree. Glenn, I've wanted to short Amazon since its IPO a couple of years ago...I said, "selling books on the Internet? that's ridiculous". Well, what I didn't realize is that if the VCs are correct and their vision come to fruition, Amazon will not be associated with books, they will be associated with Retail/Commerce on the web...anything you want to buy, you will go to Amazon.com....that's why they named it Amazon, not books.com or something like that.....we shall see..I hope my info was helpful. Regards. FB