It seems that in Brant’s, post of march 6, he believes Amazon has no liabilities and asked “will Amazon become a lender”.

It seems he mainly focused on your chart.

Cash and Short Term Investments
2008…..$3,727ml
2007….. 3,112
2006….. 2,019
2005……2,000
2004……1,779
2003……1,394
2002……1,300

Current Liabilities, 12/31-
2008…….$4.7bn
2007…….3.7
2006…….2.5
2005…….1.9

Total Liabilities-Debt
Years Ended
2008….$5.6bn
2007….5.3
2006… 3.9
2005….3.4
2004….3.5
2003… 3.2
2002… 3.3

Amazon is likely to benefit a lot from the new emerging business models in the wireless space where it has a application dominant business model. Read more about the business models in wireless industry at http://www.telecomcircle.com.

Regards,

Mohit

You’re right. That comment was out of line and I wrote it in a moment of anger. I take it back and apologize for it, and if as you say I am wrong about the posts on Yahoo Finance, I apologize for that too.

Kevin

First, the “Fred” post on Yahoo Finance is word-for-word identical to your first post as “Fred” here. There’s only one plausible explanation for that.

Second, you may not have noticed that the people who have ruined the financial industry, the economy and so much more are MBAs, but it’s true. So congrats on that.

Okay, no more. I promise.

I went back to the Yahoo Finance thread and noticed that one account “bondman90” was posting under two names, “bill” and “Fred”. Then I noticed that in this thread, “bill” posted at 7:38 last night and “Fred” posted two hours later. Am I right to assume that “Mike” and “david” who posted soon after are also Wasp-y avatars of yours?

Using multiple aliases and accounts to post messages on Yahoo’s boards is an old trick, and a juvenile one. Just as childish is your logic that someone who disagrees with you a) writes badly, b) is in Amazon’s pocket and c) is guilty of bias bordering on fraud. You say you’ve been an accountant for 30 years – assuming for a moment that’s true, it puts you around 50 or older. That’s a long time to live without learning to act like an adult. Until you can, I have nothing more to say to you or your aliases.

This debate has been going on for years, and there are strong arguments on both sides. As I said, I have gone from leading toward the “Amazon’s model doesn’t work” side to leading toward the “Maybe it works for Amazon, but not for everyone” side. Time will decide which side is right.

I welcome debate here, but it’s always nice to know the identity of the people I’m debating with. Why can’t you extend that courtesy?

But your comment neglected to mention that total assets have grown 91 percent over the past two years to $8.3 billion, or twice as fast as total liabilities (43 percent). ( http://finance.yahoo.com/q/bs?s=AMZN&annual )

I focused on debt because of the news that Amazon is close to paying it off. I compared it with cash to show that Amazon isn’t burning through it to pay off debt, but that it was in fact rising. There are many items on the balance sheet I didn’t mention to keep the post brief. Readers’ eyes glaze over when posts get long and delves into things like accounts payable.

Amazon made a choice years ago to focus on free cash flow even if it meant weaker profit margins and negative working capital. It is a controversial financial approach (if that’s not an oxymoron), and I questioned it at first but I’m starting to think it may be working for the company. I have never bought or shorted shares of Amazon, but it’s clear to me that anyone who doesn’t agree with that strategy has had years to get out. The same people who screamed about Amazon’s crushing debt seven years ago are now screaming about accounts payable and shell games. I imagine they are still short the company, and that they are having a hard time with that in this market where shorting stocks is like shooting fish in a barrel.

As for PE, it’s irrelevant to this story. Amazon is too expensive, in my opinion, and I wouldn’t buy it if I did invest in the stocks I write about (which I don’t), but some commenters have confused an explanation of why Amazon’s stock is doing well this year with a recommendation to buy it. It’s not. Some of the other logic in the above comments is, frankly, comical. Amazon’s suppliers will not pull their supplies because Amazon is one of the very few retailers selling a lot of stuff right now.

One other note. I noticed that some of these comments echo word for word a discussion on Yahoo’s AMZN message board. I’ll only point out that it’s the lowest-rent corner inside Yahoo and possibly the single worst source of stock information on the Web – a haven for bottom-rung hedge fund boys and anonymous people with a loose grip on reality. If someone disagrees with you, they’re idiots. If they offer facts to back up their view, they’re biased. I’m disappointed to see the hysterical tone on on those boards carried over here, where the discussion is more thoughtful.