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

To: Glenn D. Rudolph who wrote (60731)	6/5/1999 12:19:00 PM
From: -	Read Replies (2) \| Respond to of 164684

Studied accounting? Yes, I'm an engineer with an MBA and have started and built a total of seven substantial businesses (current one www.svnl.com). In the business before this one (www.bellc.com) I also advised companies like AMZN on business strategies. Amazon looks like a very smart, well-managed business operation to me. They could learn to talk to the street better, but hey, who's perfect? ;) Have you studied the cashflow patterns which occur when you start a medium to large-scale business? There is a period between startup and profitability where you "lose" (invest) a lot of money. This is the business the VC's are in; supplying the funds for that period, while the company builds it's valuation (pre-IPO). This is simply what Amazon is doing (post-IPO), on a larger scale than VC's could handle (using money from the public markets) -- building the WalMart of the Web. It's that simple! Sure, Barron's doesn't "get it", they've been railing against Amazon since the stock was $8. They don't "get" the stock market either, they've also been rallying against it (and continue to) since Dow 2,000! Regarding their expensive acquisitions, AMZN has to overpay because of the current crazy situation with internet stocks/valuations. They're using their own overvalued stock to buy other overvalued companies that they need. It's all relative, but when you net it out it works to their benefit; or more accurately, they're capitalizing on that situation to take some shrewdly calculated risks. I don't believe in their risk model strongly enough to blindly hold their stock; I do believe their are many other (even internet) stocks with better risk/reward, and I trade AMZN both long and short. But, I would argue for the viability of their business just based on 1) my own heavy use of the web site -- having done a lot of business with them, 2) their ability to quickly expand beyond books and music into auctions, toys, and other markets. Looking at their financials, they don't bother me a bit! It certainly is a gutsy, bold business strategy they're pursuing on a huge scale and you have to respect that. Cheers, -Steve