Ravia Suria

Bond analyst, Lehman Brothers Holdings

Although the collapse of dot-com retailers helped send the economy into a spin, we all knew it had to happen.

And Lehman Brothers Holdings bond analyst Ravi Suria played a key role in introducing a dose of reality back into the marketplace.

While most Wall Street analysts sang the praises of Amazon.com, boosting the companys stock, Suria was one of the first to point out flaws in the online retailers business model last summer.

And the concerns Suria raised went far beyond Amazon. He was one of the first to put all of retail e-commerce under the spotlight. After all, if Amazon, the worlds largest Internet retailer, cant make a profit, who can?

On June 23, Suria issued a report saying Amazon shows the "financial characteristics that have driven innumerable retailers to disaster throughout history." The day Surias report was released, Amazons shares dropped nearly 20 percent. Amazons shares have fallen more than 50 percent more since then.

Overall, Suria ignited a debate among Internet analysts and industry experts about Amazons future and the future of e-commerce retailing. Although many think Amazon is on its way to becoming the Wal-Mart Stores of the Internet, others — like Suria — believe Amazon is living on borrowed time.

On Feb. 6, Suria issued a second report arguing that this may be the year in which Amazon runs out of money.

Once again, Suria dissected Amazons financial information like an accountant and came to the conclusion that the companys working capital is dwindling. Unless Amazon can raise money from investors or get a loan from a bank, Suria predicts, Amazons working capital will turn negative in the third quarter.

"Low levels of working capital could trigger a creditor squeeze in the second half of the year," Suria said in his report.

An Amazon spokesman refuted the claim, saying Amazon is in strong financial condition. Amazons founder and Chief Executive Jeff Bezos has also said the company expects to become profitable by the fourth quarter.

Time — and reality — will tell.