Amazon — Too Good to Fail?

“In a Ponzi scheme, funds are raised from new investors to pay off promised returns to previous investors. In the Bezos scheme, Amazon raises money from investors — and passes it on to its customers by selling below cost.”

(Stock analyst, on the business model of Amazon.com CEO Jeff Bezos, January 2000)

In June 2000, Amazon.com has 17 million customers in 160 countries — and $72 in debt for every active customer.

(Washington Post)

“We were profitable for a brief period in December 1995 — it was a mistake.”

(Amazon.com CEO Jeff Bezos, December 1999)

“This is a great time for flowers to bloom. Ninety percent of them are going to get cut down.”

(Amazon.com CEO Jeff Bezos, July 1999)

In 2000, the U.S. government, at $3.6 billion, reported higher online sales than the $2.6 billion in sales by online retailer Amazon.com.

(Reuters)

“To many investors, Amazon has never been just a stock. It’s a religion.”

(New York Times business columnist Gretchen Morgenson, July 2000)

“The question for an online company is: Is it part of something that couldn’t be done before? Yahoo passes that test, and so does eBay. Amazon doesn’t. Wal-Mart is a pretty good substitute for Amazon”.

(Erik Straser, partner with Mohr, Davidow Ventures, October 2000)

“To many investors, Amazon has never been just a stock. It’s a religion.”
(New York Times business columnist Gretchen Morgenson, July 2000)

“Small investors should not have but the smallest portion of their life savings in Internet pure play companies. Short-term investors should have no portion of their life savings in Internet pure-play companies.”

(July 2000)

“The Amazon game was one of raising money, spending it on advertising, selling junk bonds — and spreading the good cheer on Wall Street.”

(Joan Lapping, president of money management firm Gramercy Capital, June 2000)

“No analyst wanted to tell the truth because their firm would lose out on the prospect of vast underwriting fees.”

(Joan Lappin, president of money-magement firm Gramercy Capital, June 2000)

“We were hoping to build a small, profitable company — and of course, what we’ve done is build a large, unprofitable company.”

(Amazon.com founder Jeff Bezos, June 2000)

“We were profitable for a brief period in December 1995 — it was a mistake.”
(Amazon CEO Jeff Bezos, December 1999)

In June 2001, at $5.7 billion, Amazon’s market value is still larger than that of all U.S. steel companies combined.

(Washington Post)

“It’s like Communist China under Mao. You’re constantly being pushed to help the collective.”

(Amazon.com service representative, November 1999)

“We are not a stock you can sleep well with at night.”

(Amazon CEO Jeff Bezos, March 2001)

October 3, 2001