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Non-Tech : Valley Media (VMIX) IPO -- Ignore unavailable to you. Want to Upgrade?

To: HandsOn who wrote (174)	5/31/1999 10:36:00 AM
From: Paul Hackett	Read Replies (1) \| Respond to of 298

Is the worm beginning to turn? It appears that Amazon's valuation is being seriously reconsidered as the excerpts from this Reuter's article indicates. Maybe it won't be long before more analysts and institutions realize that e-commerce distribution leaders, such as Valley, are the real e-commerce beneficiaries. >>>The article, headlined ''Amazon.bomb,'' contends that Amazon.com is not much different from other ''middlemen'' in the distribution business.<<< (How much is their market leadership position really worth?) >>>Barron's notes that the stock has lost nearly half of its value since April and that several analyses indicate the stock could be worth less than $10 a share. Amazon.com closed at $118.75 on Friday, May 28.<<< (No other e-commerce retailer is given a market cap. valuation any where near AMZN, although ETYS' is quickly approaching it without the revenue that AMZN generates. EBAY's business model is distinct.) >>>Amazon.com has built itself into an Internet retailing powerhouse with $293.6 million in first quarter sales. But the company has said it expects to lose money for the foreseeable future.<<< (Is the risk of never achieving future earnings actually priced into AMZN's stock?) >>>Barron's said Amazon.com's growth is demanding more warehouse space and more inventory, which diminishes the advantages that it had over traditional retailers.<<< (AMZN is becomming a victim of their own success. They are having to deal with some of the same problems that a distributor does, although distributors don't spend 50% of their revenues on advertising.) Don't misunderstand me. I think Amazon.com is a very good company with great customer service, but if they are worth 20-30 billion dollars, then what are the other e-tailers worth? and what are the leading e-commerce distributors actually worth? I think we'll continue to see in the near future, a diminishing in market cap. differentials for all these entities. And early indications are that this will result in AMZN and ETYS being brought back down to earth, while the other e-tailers hold their ground or retreat slightly. As far as Valley Media is concerned, I'm hoping that it will become recognized as a safe-haven with great future potential for weary e-commerce investors, not only for music and video sales, but the potential of providing distribution services for other popular e-commerce products.