Amazon making less than you think

[Waylander]

http://time.com/money/3697604/amazon...ow/?xid=timefb

And let the flame war commence.

[Phogg]

Okay.

I will open the flame war (as requested) by pointing out that the Mötley Fool is a bloat ware site full of crappy animated flash advertisements that slow your browser to a crawl. And one must click through page after glacially loading page only to read the inevitable nothing new or profound.

Nobody who has watched Amazon for a long time thinks they are making a huge profit. They plow most of the money that comes in back into infrastructure and developing new markets. Not a model conducive to producing high margins in the current time frame. Sometimes they even lose money doing that.

If you were to analyze Amazon attempting to evaluate the worth of their assets and established customer base, then they would look quite a bit better.

But nobody who watches business expects them to be cutting big dividend checks, so the source is probably just fluff intended to lure suckers to their site so they can sell them cookie cutter investment advice. The people dumb enough to have thought that there was some sage information in this tripe will probably pay for the scam investment strategies.

Was this flame up to your expectations?

[jgaiser]

Originally Posted by Phogg

Was this flame up to your expectations?

+1

[theducks]

Just look at the list of Amazon companies at the bottom of their web page .
That list does not include some infrastructure companies,
I know of a few within a few miles of here.

I am not against Big Dividends, but company long-term survival is important.

IMHO Wall street has destroyed more perfectly good companies with their incessant "Grow or you are a failure'.

Somethings will always be needed. A company that can continue to make product (economically) to fill those needs is successful in my book, but they need to still watch the horizon and shift as needed. Why have buggy whips sales fallen?

[GoSharks]

Originally Posted by theducks

Why have buggy whips sales fallen?

Who Knows, now that '50 Shades...' is in theaters, maybe they'll have a revival!

[theducks]

Originally Posted by GoSharks

Who Knows, now that '50 Shades...' is in theaters, maybe they'll have a revival!

The Movies have gone 'Retro' and are now being released in glorious B & W ?

Next you will know, the movies will be Silent, with a live musical accompaniment

My Parents first TV had a RCA jack on the back labeled 'Color Adapter' (raw video). Things have changed.

[tubemonkey]

Originally Posted by GoSharks

Who Knows, now that '50 Shades...' is in theaters, maybe they'll have a revival!

[murg]

Originally Posted by theducks

Why have buggy whips sales fallen?

I have a buggy whip. It's never worked right...

[crich70]

Originally Posted by theducks

The Movies have gone 'Retro' and are now being released in glorious B & W ?

Next you will know, the movies will be Silent, with a live musical accompaniment

My Parents first TV had a RCA jack on the back labeled 'Color Adapter' (raw video). Things have changed.

I saw one a few yrs ago like that. It was "the mark of zorro" starring Doug Fairbanks Sr. A theater in Madison was showing it. A nice step back in time.

[pwalker8]

Originally Posted by theducks

Just look at the list of Amazon companies at the bottom of their web page .
That list does not include some infrastructure companies,
I know of a few within a few miles of here.

I am not against Big Dividends, but company long-term survival is important.

IMHO Wall street has destroyed more perfectly good companies with their incessant "Grow or you are a failure'.

Somethings will always be needed. A company that can continue to make product (economically) to fill those needs is successful in my book, but they need to still watch the horizon and shift as needed. Why have buggy whips sales fallen?

Eventually investors want return on their investments. That's normally either dividends or ever increasing stock price. Amazon's stock price really grew over a 5 year period, peaking a year ago. It will be interesting to see if it can regain that peak.

Amazon's big issue is that it's one thing to be investing in growth, it's something else when your operating expenses are eating up your profits. For the last couple of years, Amazon has been having issues with increasing operating expenses. That's why people have been putting out articles talking about this issue. It's also why Amazon has been trying to put the squeeze on their suppliers. One of the problems with giving customers free stuff is that the money to pay for that stuff has to come from somewhere.

[rdfry]

Well Amazon usually loses money.

[SteveEisenberg]

Originally Posted by pwalker8

Eventually investors want return on their investments.

Well, yes. People do like to get unearned money. And, in the long run, unless Amazon earns money, the stockholders won't get unearned money. But I'm not quite sure of your point here. Are you predicting a hostile takeover? Or are you predicting that the stock will go down? Or that Amazon will become bankrupt?

If its that last one, I would point out that eventually, even generally successful companies do go through time of financial distress. Sometimes this greatly weakens or destroys them, but you can't count on that.

All major US airlines (Northwest, TWA, US Air, American, United, Delta) have gone bankrupt in the past fifteen years. This was bad for the stockholders, but the underlying business functions (for example, the old Northwest Orient Tokyo hub now run by Delta) still exist, either independently or as part of another company. Something similar is true for once-bankrupt giants like IBM and GM.

I'd think, or hope, we'd all agree that what makes for a great airline isn't stockholder value, but safety. It's harder to say what makes for a great mobile-reading vendor, but, as a reader, I don't see Amazon's financial weaknesses as a big issue. Regardless of whether Amazon makes money, and regardless of whether stockholders one day get zeroed-out, Amazon's Kindle and eBook business will retain a tremendous market share for the foreseeable future.

[eschwartz]

Originally Posted by Phogg

Okay.

I will open the flame war (as requested) by pointing out that the Mötley Fool is a bloat ware site full of crappy animated flash advertisements that slow your browser to a crawl. And one must click through page after glacially loading page only to read the inevitable nothing new or profound.

Nobody who has watched Amazon for a long time thinks they are making a huge profit. They plow most of the money that comes in back into infrastructure and developing new markets. Not a model conducive to producing high margins in the current time frame. Sometimes they even lose money doing that.

If you were to analyze Amazon attempting to evaluate the worth of their assets and established customer base, then they would look quite a bit better.

But nobody who watches business expects them to be cutting big dividend checks, so the source is probably just fluff intended to lure suckers to their site so they can sell them cookie cutter investment advice. The people dumb enough to have thought that there was some sage information in this tripe will probably pay for the scam investment strategies.

Was this flame up to your expectations?

+1

Same old, same old, moving along now...

[pwalker8]

Originally Posted by SteveEisenberg

Well, yes. People do like to get unearned money. And, in the long run, unless Amazon earns money, the stockholders won't get unearned money. But I'm not quite sure of your point here. Are you predicting a hostile takeover? Or are you predicting that the stock will go down? Or that Amazon will become bankrupt?

If its that last one, I would point out that eventually, even generally successful companies do go through time of financial distress. Sometimes this greatly weakens or destroys them, but you can't count on that.

All major US airlines (Northwest, TWA, US Air, American, United, Delta) have gone bankrupt in the past fifteen years. This was bad for the stockholders, but the underlying business functions (for example, the old Northwest Orient Tokyo hub now run by Delta) still exist, either independently or as part of another company. Something similar is true for once-bankrupt giants like IBM and GM.

I'd think, or hope, we'd all agree that what makes for a great airline isn't stockholder value, but safety. It's harder to say what makes for a great mobile-reading vendor, but, as a reader, I don't see Amazon's financial weaknesses as a big issue. Regardless of whether Amazon makes money, and regardless of whether stockholders one day get zeroed-out, Amazon's Kindle and eBook business will retain a tremendous market share for the foreseeable future.

My point is that a strategy of constantly rolling everything back into the company will eventually be frowned on by investors, making it hard to secure more money from investors, i.e. stock prices will go down. When that cut off point comes varies depending on if the investors can see an end point or not. I'm not big on running a company for "shareholder value" (a new buzz word that can have many meanings) but for long term success, a company has to have balance.

I will point out that return on investment is _not_ unearned money, any more than the interest that one earns on bonds or savings accounts is unearned money.

[leebase]

A good company and a good stock are not necessarily the same thing. $20grand for a Ford Focus might be a great deal. $100 grand for the same car most assuredly would not. Amazon's stock price is way out of proportion to the money it earns. You HAVE to believe in Amazon having shocking amount of growth to justify their price. It could well be that they have run out of "greater fools" to sell the next price bump.

Amazon the company can do just fine....but the investors are likely in for a world of hurt.