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

To: 16yearcycle who wrote (53685)	4/28/1999 10:18:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

We'll see about that too. This thread is very bearish, which is always a good sign for the bulls. Gene, I was thinking that:-)

To: 16yearcycle who wrote (53685)	4/29/1999 12:37:00 AM
From: Peter Bernhardt	Read Replies (1) \| Respond to of 164684

This thread is very bearish, which is always a good sign for the bulls. I guess perception is everything. Until a few hours ago, I would have believed the opposite. Anyway, I took a fast look at the report and found a few items worthy of note. First, Amazon doesn't break out revenues by product categories. I wonder with others here if revenue in the main product categories actually did increase. Such an increase in a traditionally slow quarter for retailers would indicate that secular growth is continuing apace. In other words, growth in e-commerce itself should have propelled Amazon to newer revenue heights. Such was the point made in this morning's Briefing.com preview of Amazon's earnings as an argument for looking most closely at Amazon's revenue number. And on its face, it is impressive. Yet despite the increased revenue number, how can anyone draw any conclusions if the revenue numbers are not broken out by category. Although no one really cares about Amazon's EPS number, it should be pointed out that interest income (which was $10.1 million dollars) contributed 7 cents to the earnings figure. By comparison, for all of fiscal 1998, interest income was a tad higher than $14 million. But most importantly, Amazon executives cautioned in the conference call that growth will not keep up its torrid pace; this will only add fuel to the fires of speculation that this internet commerce thing might not grow into infinity as some Amazon investors may still believe. Perhaps the time is sooner at hand than most are willing to believe that the market might actually begin to evaluate Amazon based on something other than limitless potential for growth. In the meantime, I find the company that once prided itself (and was given as one of the many reasons for high valuation) on maintaining low inventories, has shown a dramatic increase in those same inventory levels this quarter. Up 53% from last quarter. But that's part of the ever evolving business model (a model which has not evolved, I should also point out, to the extent that it may be relied on to ever result in profits). Current liabilities also grew by 24% during the quarter. Factor out the infusion of cash by the debt offering, and current assets actually shrunk during the same time frame (even after accounting for the increased inventory!). One can only imagine just how much cash was drained away this quarter. My favorite number, however, is the accumulated deficit. Up 38% this quarter to nearly one-quarter of a billion dollars. And, of course, there was a commensurate drop in shareholder's equity. But then again, perception is everything. Balance sheets and income statements have never mattered when it comes to Amazon. But then Amazon admitted in so many words (and in the numbers) that the sky does have a limit. Maybe this will sober up a few analysts enough to actually look closely at the dry work of the accountants. I'm afraid that if they do that, that this is very likely to have a chilling effect on perception. Anyway, at least long enough for Amazonians to buy the dip. - Peter B

To: 16yearcycle who wrote (53685)	4/29/1999 1:16:00 AM
From: Al Chechatka	Read Replies (1) \| Respond to of 164684

What bothered me over the weekend was the potential of the Bond conversion at above 230 because they would have had 1 billion dollars of free money. Even though it would have diluted the company, its balance sheet would have had little debt and tons of cash for acquistions. And since the first convertible was so successful, there would have been another with probably even more favorable rates for the company. That was the good news. But now it has changed 180 degrees. The stock will no longer challenge that number (at least not this week). But if sentiment starts looking negative as far revenue growth and long term no profits, then we are in for some trouble with the stock. They have to start paying back these loans in 2003. "They should make 100 million a year by 2003," you say to yourself, but that just pays the debt! They have to make money to further expand their growth. Good things can happen as well. The Internet stocks can continue its crazy run long enough for the companies that AMZN invested in .ie Drugstore.com and others to get bought out or go public. That will generate huge cash for them. What the story said in tonights conference call is AMZN is bleeding money and will continue to bleed money for time to come. It may be ignored...it may burst the bubble, it may do a soft landing (my bet) like in Feb and then get analyst coverage that makes it go up 50% in 3 days. Al C.