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Amazon.com Inc. Message Board

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  • jk_oblong jk_oblong Dec 7, 1997 12:03 AM Flag

    Short Sale

    You forget about the real player out there, Barnes&Noble,

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    • Tell me more - what do you like about b&n - how can they levearage the two (physical and on-line?)

      • 2 Replies to daveeppy
      • Hi, I found this article from Bloomberg on SI and copied here for you to read:



        Seattle, Dec. 5 (Bloomberg) -- Amazon.com Inc., the online
        book retailer that calls itself the Earth's Biggest Bookstore,
        shows that the word ''Internet'' works wonders.

        Named after the Amazon River, the Seattle-based company
        expects millions of consumers to scan its online catalog of 2.5
        million titles and make purchases from home with the click of a
        computer mouse. That's why Amazon's stock was one of the hottest
        initial public offerings of the year, rising threefold since May.

        Investors who see nowhere for the stock to go but up may
        want to think again. There's scant evidence that droves of people
        want to buy books online -- and if they do, money-losing Amazon
        may not be the service they use.
        ''Most people won't give up on bookstores,'' said Giovanni
        Zocche, a software consultant at Bora Ventures.

        What's more, if online book buying takes off, Amazon's
        advantage of being first could quickly disappear as bigger,
        better-financed book retailers muscle their way into Internet
        selling.

        Barnes & Noble Inc. is beefing up its online site, which
        opened in May, and Borders Group Inc. plans to open its site for
        business in January. The two retailers lead the $25 billion U.S.
        book-selling industry with their chains of supermarket-size
        stores.
        ''There's already a battle,'' said Hambrecht & Quist LLC
        analyst Genni Combes, who has a ''buy'' recommendation on Amazon.

        Not Shy

        While Amazon executives won't say when or if the company
        ever will make money, Barnes & Noble isn't shy about discussing
        its online service. The New York-based company expects sales of
        $100 million to $125 million in 1998 and turn a profit in 1999,
        said Chief Operating Officer Stephen Riggio.
        ''With Barnes & Noble's nameplate, they'll be able to gain
        at least as much market share as Amazon,'' said Blackford
        Securities analyst Jason Klein, who rates Barnes & Noble a
        ''buy.''

        There's no arguing with Amazon fans on one point: The stock
        is the equivalent of a bestseller. Since going public at $18 in
        May in a $54 million IPO, the shares have soared and recently
        trade at about 54. The stock closed at a high of 66 on Oct. 29.

        At recent prices, Amazon has a market value of about $1.29
        billion. Not bad for a company with $90 million in sales in the
        past four quarters. Compare that with Barnes & Noble, with a
        market value of $2.2 billion and sales of $2.71 billion -- and a
        profit to boot.

        Selling More, Losing More

        Started in 1994 by former Wall Street money manager Jeffrey
        Bezos, Amazon's plan is to boost sales rapidly, helping it cover
        fixed costs. Then, once sales are high enough, demand the same
        discounts its bigger rivals get from publishers.
        ''It's a scale business,'' said Amazon Chief Financial
        Officer Joy Covey.

        Yet, the company's losses are expected to widen as its sales
        increase, mainly because of high sales and marketing costs.
        Indeed, third-quarter sales shot to $37.9 million from $4.2
        million a year earlier, yet its loss more than tripled to $8.5
        million from $2.4 million.

        Oddly enough, Amazon has higher overhead costs than its
        rivals, which must pay for hundreds of stores, vast inventories
        and thousands of workers. Amazon has about 19 cents left from
        each $1 in sales, while Barnes & Noble holds onto about 35 cents
        and Borders keeps about 25.

        Story Telling

        Many investors aren't all that concerned with the numbers,
        said consultant Zocche.
        ''They get excited by the story,'' he said.

      • what goes up must come down!!!! bought puts today

    • Not really. Look at there stock! That's a laugh and a half! Amazon.com is going to kill them like they already are.

 
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