Amazon post the largest quarterly loss in 14 years

[pwalker8]

Originally Posted by j.p.s

I replied directly to your point with a factual refutation. Please extend the same courtesy to me or not reply at all.

Your reply to me has nothing to do with your original post or my reply. You have done this dozens of times and I am getting very tired of it.

Huh? It had everything to do with your post. The thread is about Amazon losing a boat load of money this quarter (and if you read the article, you will see that they have lost money in 3 of the last 5 quarters). You replied "Yes, but Apple put out the iPod after being around for 20 years" and I responded, that that is true, but no one would have claimed that it wasn't a big deal if they had lost a lot of money.

Companies come out with new products all the time, that's how they stay alive. Companies aren't considered just like brand new start ups just because they introduced a new product line. Once a company gets past the start up stage, they either make a profit, or investors question why aren't they making a profit.

[pwalker8]

Originally Posted by bgalbrecht

Amazon's board doesn't have to care about a short term stock price drop unless they are planning on raising cash via new stock offerings or if they are threatened by a board takeover by some corporate raider/activist stockholder. Since Amazon has been willing in the past to accept losses while they are building the business (7 straight years in the beginning), I expect that if they believe that these losses are really investments in building infrastructure and customer loyalty programs, they'll let Bezo have losses for several quarters before pushing for alterations in the operating model.

I view the things the analyst mentions in the WSJ article, the phone, the set-top box, streaming originals, as items that tie customers into the Amazon infrastructure, walled garden, and loyalty programs, just like the Kindle and Amazon Prime. Amazon knows that the customers who buy these things spend a lot more at Amazon, and if they have to spend a lot of money to get the infrastructure in place, it will pay back not just on the sales of these items.

You certainly have a point, though as the quote that I posted earlier points out, investors are starting to question if some of these expenditures will lead to new customers. When a company loses money, then the money to cover those losses have to come from somewhere. Usually either borrowing or new investors.

[bgalbrecht]

Originally Posted by pwalker8

You certainly have a point, though as the quote that I posted earlier points out, investors are starting to question if some of these expenditures will lead to new customers. When a company loses money, then the money to cover those losses have to come from somewhere. Usually either borrowing or new investors.

Investors or Wall Street analysts and pundits? I wonder how much of the selloff was from long term investors, and how much was from institutional holdings that sold because of trading programs, which will buy back in in a few months when the latest news is positive?

According to Yahoo Finance, Amazon's got about $8 billion in cash, $3 billion in debt. They can afford to take the long view unless the board loses faith in Bezos, or the stock drops so low that there's a takeover attempt. I just don't see either of those things happening any time soon.

[pwalker8]

Originally Posted by bgalbrecht

Investors or Wall Street analysts and pundits? I wonder how much of the selloff was from long term investors, and how much was from institutional holdings that sold because of trading programs, which will buy back in in a few months when the latest news is positive?

According to Yahoo Finance, Amazon's got about $8 billion in cash, $3 billion in debt. They can afford to take the long view unless the board loses faith in Bezos, or the stock drops so low that there's a takeover attempt. I just don't see either of those things happening any time soon.

The quote was from "Michael Pachter, a Wedbush Securities analyst". Certainly if Amazon has good results next quarter (i.e. the holiday quarter) then that will improve confidence.

[eschwartz]

Originally Posted by SteveEisenberg

If Amazon gets to a point where is has to make money, I suppose it could jettison whatever parts of its business lose money (this?) and thus goose profits for a couple years.

What makes you think AWS loses money?

Not even taking into consideration the reasonable idea that they need the servers for their OWN business whether they rent it out to others or not... they have the infrastructure anyway.

[hardcastle]

Guys, just hold on, I'm about to say something pointless and foolish, and then you should all react to it. Ready, here we go...

Oh wait, I see the OP already beat me to it. Shucks, I was just about to set up some bait by pulling the same doofus pointless rhetoric I always pull but call it "bait" and pretend it was all part of the plan. Then when people call me out on my inflammatory babblespeak then I could just ignore their salient points and snicker! Dangnabbit, foiled again.

[SteveEisenberg]

Originally Posted by eschwartz

What makes you think AWS loses money?

I got that impression from an article I read earlier this month, but I can't recall where it was published, and it could easily be wrong.

Not even taking into consideration the reasonable idea that they need the servers for their OWN business whether they rent it out to others or not... they have the infrastructure anyway.

So, even if someone were to leak all Amazon's internal financial reports, we still might not know, for sure, if AWS is helping Amazon's financial position. The judgment could depend on how Amazon's internal computing costs are allocated to different business lines.

When it comes to who is better for literature, Amazon or Hachette, I've got some strong opinions. But when it comes to who has better financials, I'll admit to a fair degree of ignorance.

[j.p.s]

Originally Posted by eschwartz

What makes you think AWS loses money?

Not even taking into consideration the reasonable idea that they need the servers for their OWN business whether they rent it out to others or not... they have the infrastructure anyway.

Originally Posted by SteveEisenberg

I got that impression from an article I read earlier this month, but I can't recall where it was published, and it could easily be wrong.

A big chunk of Netflix streaming is served by AWS. Do you believe Amazon is subsidizing Netflix? Do you believe Netflix would pay more for bandwidth than comparable AWS customers?

[Barty]

If there is one part of Amazon that is making money, it is AWS. It is huge. Like 85% of the cloud computing market. Sure they are cutting prices but guess what costs are falling even faster.

I would rather be Amazon than any tech company you can name. Even Google. Not that I necessarily LIKE them. Wouldn't want to work in their warehouse, that's for sure.

[Rizla]

It's all part of Amazon's master plan for world domination.

[eschwartz]

Originally Posted by Rizla

It's all part of Amazon's master plan for world domination.

I KNEW IT I KNEW IT!!! (!!!!!)

[ApK]

Originally Posted by rcentros

And I'll bet the stock comes back up within a month.

You called it with room to spare:
http://finance.yahoo.com/echarts?s=A...22linear%22%7D