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

To: MSI who wrote (54503)	5/1/1999 6:14:00 PM
From: Glenn D. Rudolph	Read Replies (1) \| Respond to of 164684

SEATTLE (CBS.MW) -- Amazon.com saw $3.9 billion of its stock market value vanish on Thursday, as investors braced for slower sales growth, aggressive spending and losses for the foreseeable future. Shares of Amazon.com (AMZN: news, msgs) lost 25 1/4, or 13 percent, to 168 1/4. Scott Ehrens, an Internet analyst at Bear Stearns, topped his note to clients this way: "Good results, but expect slower growth." Ehrens said sales growth would "slow from the prior four quarters' 32-65 percent rate to a 6-16 percent rate over the balance of the year." But some investors aren't concerned. "Between now and profitability, there's a lot of red ink," said Mai Pague, president of Pogue Capital Management, who has held shares of Amazon since they were in trading in the mid-teens. "But they're building for the future." Derek Brown, an Internet analyst at Volpe Brown Whelan, said he "wouldn't chase the stock higher" but he called it a good long-term holding. Lise Buyer, an Internet analyst at Credit Suisse First Boston, said she continued to "believe that Amazon is well positioned" and that the stock should be a "core" holding. Although, she also attempted to calm her clients by advising them to "inhale" and "exhale." She said in a report that this "is the time for true believers to stand up and be counted." While Amazon's growth continues to astound, she said, "so will the size of the newly revised expected operating losses." If history is any guide, Amazon's stock may climb higher in the coming days. In the past four quarters, excluding Thursday's report, Amazon's stock has on average jumped 2.7 percent after one week and been up 27 percent one month later. What it takes "Expansion plans will require greater costs," said Chief Financial Officer Joy Covey in a conference call with investors on Wednesday after the quarterly report was released. While Amazon plans to err on the side of overbuilding in advance of demand, Ehrens said "to date you could drive a truck through the difference between Amazon's investment in fixed assets vs. bricks-and-mortar players. So, we're not sure just where this will settle out." Buyer projects steeper losses this year and next. She revised her estimates for operating losses this year by 123 percent to $297 million and by 348 percent in 2000 to $280 million. On Wednesday, Seattle-based Amazon said first-quarter losses, excluding acquisition charges but including interest expenses, totaled $36.4 million, or 23 cents a share. Amazon's net loss widened to $61.7 million, or 39 cents per share. Quarterly revenue surged, however, to $293.6 million from $87.4 million a year ago and from $253 million in the final three months of 1998.