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Amazon.com, Inc. Message Board

  • The_1nvestor The_1nvestor Dec 11, 1997 9:15 AM Flag

    In defense of Amazon!

    In the short term Amazon may well be over priced, BUT
    You should take note of the following points;

    1. Amazon is a "start-up" and as such would have large intial advertising to increase public awarness.

    2. As such when public awarness has reached a sufficient level then they would no longer need such a large advertising bill. (Very low overheads, and as such they should be making a lot more than 35c in the dollar of gross profit

    3. Amazon unlike the bricks and mortar retailer has a wider international reach. It is able to circumnavigate the franchisee arrangements for the books in other countries (eg UK, France, Germany, etc)

    4. Once Amazon has the volumes in place it would be able to increase the margins via discounts it recieves from it's the publishers.

    5. If the much lower book prices are maintained, the bricks & mortar (B&M) brigade would also have to lower the prices or risk loosing all their customers. (contrary to popular oppinion you do not need to owen a pc to have internet access, cafes and library would do very nicely thank you very much!)

    6. If the B&M's lowered their prices then due to their higher fixed costs they would be haemoraging losses, if they don't then they risk losing their customers (nasty catch 22) That you will find is probably the primary reason that Barnes & Noble is setting up an internet.

    7. If Barnes & Noble is competitive in wining market share from Amazon in the US (As the number one it's very difficult not to). It would end up both growing the business and also canabalsie clients from it's existing B&M establishments (Wouldn't Amazon have a greater chance of poaching them once they've felt comfortable using an intenet retailer?)

    8. Amzon has a far stronger brand awarness & loyalty than Barnes & Noble internationally and that may well become a large percentage of Amazon's future sales! Also they may well be a able to gain higher margins on overseas sales (Shiping costs or some such excuse)

    As such in the medium term it may be wiser to be short Barnes & Noble and long Amazon !!!

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    • Perhaps the greater of all hypes
      is within this group of shorts.

      They better pray, to be correct because
      if amazon just hints of good news
      then all they're hype wont be enough.

    • I meant you compared to not just the Amazon board, but to all posters on any board. I think you win easy, don't you?

    • #The internet stocks seem to follow major indexes
      at present time. Whenever the indexes hit support or
      resistance levels, the internet stocks turn around with
      them. To me the indexes look very dangerous. There are
      well defined support lines for Nasdaq, DJ and SP500.
      When their support lines break, there will be a big
      slide in the whole market.
      The internet's recent
      Head and Shoulders patterns can be "complex Head and
      Shoulders patterns" having more than one right shoulder.
      Recent rally in internets was on relatively light volume
      which was not a good sign. My bias is bearish. My hope
      is that the market crashes, and then I will buy the
      best companies. I can see Dow Jones dropping to 9000
      during normal correction. If there is a crash DJ will
      see 7000.

      MY targets.
      Yhoo $75, AMZN $51.

    • can you run a check of all the Yahoo! boards collectively? For all companies? I think Sonny would come out tops as Mr. Verbosity.

    • >
      Thanks for the stats. I appreciate the
      work.
      <

      No problem. For the record, you
      posted 1451 times while Nem did 962. I earlier claimed
      that Nem has posted 999 times, but my previous method
      double-counted some posts.

    • compare and contrast:

      1) Your WSJ article
      with....

      2) HBR pg. 159ff: "Retailing: Confronting the
      challenges that face bricks-and-mortar
      stores.

      Actually I do not have WSJ. You might want to post some of
      the highlights for the board. I'm sure they'll be
      plenty gruesome. The HBR article appears to be fairly
      balanced. Have only skimmed it so far.

    • Good post, 1nvestor. You are exactly correct
      about Amazon's global reach and popularity. Many
      institutions and government agencies (maybe libraries even?)
      in foreign companies open up accounts with Amazon in
      Korea and throughout the
      world.

      ----------------------------

      Amazon.com Enjoys Soaring
      Sales in Korea May 19, 1999

      By Michael Yei-Tae Kim
      InternetNews.com Korea

      Correspondent

      [Seoul, KOREA] Amazon.com, the world's
      largest
      Internet-based bookstore, saw its sales growing
      rapidly in
      Korea.

      The company sold a total of 3,087 books,
      worth
      190.97 million won (about US$15,910) in less than
      two
      months since it launched sales in Korea in
      late
      March, according to Samsung Corp. Amazon.com
      is
      selling books in Korea through SIS & Amazon, an
      online
      bookshop run by Samsung Corp.
      Through the Korean shop,
      Amazon.com sold 385 books
      in March and 1,954 books in
      April. Officials of
      Samsung anticipate that more than
      3,000 books will
      be sold in May through the Internet
      bookshop.
      Among the best-selling books in Korea
      through
      Amazon.com are The Speed of Thought by Bill Gates,
      which
      was ranked as the top with 154 books sold,
      and
      Direct from Dell by Michael Dell, which was
      ranked
      second with 85 books.

      Also, Goldman Sachs by Lisa
      Endlich was the third
      best-seller, which was followed
      by a guide book
      for Java technology The Complete
      Idiot's Guide to
      Java 1.2 by Michael
      Morrison.

      By category, computer-related books accounted
      for
      28 percent of the entire sales in Korea
      by
      Amazon.com through SIS & Amazon site. Books about
      economy
      and management constituted 23 percent,
      while
      e-commerce books took 18 percent.

      The officials of
      Samsung Corp. said that an
      overwhelming majority of
      purchasers of books from
      Amazon.com are government
      organizations and
      research institutes, although the
      percentage of
      individual customers is increasing
      steadily.

      "Amazon.com's book sales in Korea are growing at a
      faster
      clip than expected due largely to
      customer-oriented
      marketing efforts, although it
      started its business in
      Korea just two months ago
      through collaboration with
      us," said a Samsung
      official. "With such a growth
      trend, Amazon.com is
      expected to clinch nearly 20
      percent of the
      domestic market for imported books by
      the end of
      this year."

      Faced with tough
      challenges from Amazon.com, Kyobo
      Book Center, the
      nation's largest bookstore
      controlling about 15 percent
      of local imported
      book market, is on an alert. It
      is struggling to
      sharpen its competitive edge in
      terms of both
      price and service.

      Kyobo
      officials claimed that they have secured a
      price-wise
      competitiveness against Amazon.com by
      lowering their book
      delivery cost to US$5. The
      Korean bookstore also
      shortened the time required
      for delivery from the
      previous 15-20 days after
      receipt of orders to 7-10
      days.

      "Kyobo has been preparing for the challenge from

      Amazon.com," said Park In-Hwan, president of Kyobo
      Book
      Center. "Eventually, customers will benefit
      from the
      competition as both Kyobo and Amazon.com
      will compete
      fiercely to offer better service and
      information."

      • 1 Reply to Nemesis_editor
      • AMZN
        GET STOCK



        LAST
        MATCH
        Price
        106 3/4
        Time
        17:08:31


        TODAY'S ACTIVITY
        Orders
        13,287
        Volume

        1,705,298


        BUY ORDERS
        SHARES
        PRICE
        333
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        1/4
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        1/8
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        240

        106 1/16
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        106
        300
        105 5/8
        49
        105 9/16
        150

        105 1/8
        50
        105
        8
        105
        (91
        more)

        SELL ORDERS
        SHARES
        PRICE
        431
        106
        3/4
        15
        107
        100
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        60
        107 3/8

        16
        108
        25
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        109 17/32

        90
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        350
        110 1/4
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        292
        111

        100
        111
        1,125
        111 5/16
        (128
        more)




        As of 17:17:24

    • sensible!
      <EOM>

    • Dow will likely not make it over 9150 and could
      even decline to rest just above 9100. NASDAQ is likely
      to advance to 2010 after bouncing off 2020. AMZN
      will likely spend all day testing 220 and even drop
      back to test 200 from time to time.

      Overall,
      Wednesday will turn out to be a very frustrating day for
      both longs and shorts.

    • Enhanced ability to tell the difference between a
      great opportunity and "best opportunity of the day" is
      what sets the experienced trader apart from the naive
      one.

      An experienced trader can usually tell from past
      experiences whether a given opportunity is likely to
      resurface regularly or not. Take AMZN at 230. AMZN had
      clearly over-reached after showing weakness at 170.
      Instead of going up at more stready pace, it shot up
      above 200 and then ran into some turbulence and even
      reached higher to 230. An experienced trader knows this
      is a bulge or a 'fat' that must be removed before
      consolidation. But this situation by itself is only ideal for
      shorts and not for puts because you don't know when the
      'plunge' will take place. I bought the 'puts' because of
      the rumors about margin requirements being tightened
      in the week following Thanksgiving. It was the
      overreach plus the upcoming potential 'trigger' that made
      me conclude this was a great opportunity and not
      likely to be seen daily or even weekly
      basis.

      Take the AMZN's close at 192 yesterday. You can
      clearly see the support at 180 and that Dow would have to
      approach 9000 in order for AMZN to continue to plunge.
      Selling pressure was great at the end but you got these
      'obstacles' ahead which throws a lot of uncertainties. You
      knew that the day's plunge was caused by margin
      requirements being tightened. Talk about over-valuation was
      just starting and have not fully soaked down to the
      naive investors yet. I exited when AMZN was at 195
      because I couldn't read into today with certainty. I
      don't open new positions or leave positions unclosed if
      I am blind. I could have kept it until morning but
      chance of volatility at the opening bell was just too
      dangerous for my taste.

      Unfortunately experiences
      can not be gained without also gaining
      scars.

      If you are inexperienced, I don't think you are
      FearlessNow since you indicated you had some 'scars', you can
      do some 'what-if' sessions to see if the opportunity
      is right for you. Just imagine that you took the
      opportunity and draw some chart for the stocks for the next
      five days: one for best scenario, one for worst, and
      about three in between with turns at the place where
      the 'triggering events' are likely to occur. For each
      chart, run your pen along the stock's movements as if
      you were actually watching the tick-by-tick movement
      and ask yourself how you feel. If you still feel good
      after going through all the 'what-if' charts, then go
      ahead and make the trade.

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