Quote:
Originally Posted by pwalker8
" Amazon.com Inc. ’s soaring ambitions are coming at a steep cost, dragging the e-commerce giant to its largest quarterly loss in 14 years.
A surge in spending on new-product development, music and video licensing, and other parts of the Seattle company’s expansion strategy led to a net loss of $437 million in the third quarter, worse than its year-earlier loss of $41 million. The wider loss came despite a 20% jump in revenue to $20.58 billion."
In addition, the article reports that Amazon took a $170 million charge on it's Amazon Fire smartphone which has been selling poorly.
Ouch. Amazon's stock prices fell 12% in after hours trading in reaction to the news. It's one thing to not show a profit after rolling the money back into the company, it's totally different to show that big of a loss.
I eagerly await to see all the usual suspects try to spin this into either a "not a big deal" or a "it's just a paper loss".
I suspect this new may have something to do with Amazon giving Hachette most of what it wanted.
|
Jeff Bezos has long been a believer in "I'll sell for a loss but I'll make up for it in volume!" Their first quarterly profit was 7 years after it was founded.
I don't see much of a problem with them taking a big quarterly loss for plowing large amounts of up-front money into new-product development, music and video licensing, as long as future quarters don't need that sort of expenditures. That hit for the Amazon smartphone must hurt, though.
Where do you get "Amazon giving Hachette most of what it wanted"? I haven't heard anything about them signing a contract, did you mean to say Simon & Schuster? The S&S deal was too recent for it to have any effect on last quarter's earnings, and I'm sure that the lack of a Hatchette deal wasn't affecting their earnings much either way.