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Why Amazon Is Crashing: Jeff Bezos' Nightmare Quarters In Charts

Tyler Durden's picture




 

The only six charts you need to know why the Amazon dream is over and why AMZN stock is currently crashing after hours to fresh 52 week lows.

Total employees and global sales growth:

 

Quarterly Operating and Net Income

 

Operating Margin: whoosh

 

LTM Operating Margin: at 0.1% it is pretty much the lowest ever.

 

Q3 over time for profit and net income

 

And for operating margin

 

and the result so far...

 

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Thu, 10/23/2014 - 16:27 | 5368899 HedgeAccordingly
HedgeAccordingly's picture

Deep down the rabbit hole she goes.

 

http://www.hedge.bz

Thu, 10/23/2014 - 16:46 | 5368993 max2205
max2205's picture

Ben just called and said that this is just TRANSITORY

Thu, 10/23/2014 - 16:51 | 5369024 imaginalis
imaginalis's picture

Amazon used to be interested in it's customers but then Bezos developed an interest in politics.

Thu, 10/23/2014 - 16:58 | 5369065 Say What Again
Say What Again's picture

How did their stock price get so high?  AMZN has obfiscated their profits for the last 10 years or more.  AMZN's PE is currently reported as 800+, depending on where you look.

But I know that the Central Bankers will be biding it up on Friday, so this looks like a good place to go all-in!

Thu, 10/23/2014 - 17:03 | 5369117 CrazyCooter
CrazyCooter's picture

I supposed this is probably bad karma, but I love Amazon; greatest selection, lowest prices, cheapest shipping ... if you live in Alaska. I buy all kinds of stuff, including some bulk foods.

I don't give a shit about their stock prices, as long as they keep their doors open and don't gouge me on shipping. I have Prime right now, but probably won't keep it. I don't care if my shit takes two weeks to get here, I just want to save money.

Regards,

Cooter

Thu, 10/23/2014 - 17:32 | 5369266 nope-1004
nope-1004's picture

If the market were remotely real, the stock would have never got that high to begin with.  FED ponzinomics will make for a spectacular unwind across the board.

 

Thu, 10/23/2014 - 17:46 | 5369361 The9thDoctor
The9thDoctor's picture

Their stawk is down because of SALES TAX.

The whole benefit of ordering online and waiting 5 days for UPS Ground, is I saved 9%. Now, if I have to pay that 9% sales tax anyways I might as well drive down the street and buy the item in a brick and mortar store and have it that day.

Until Bezos can snuggle up to politicians and get the online sales taxes taken off, his company will no longer grow.

Thu, 10/23/2014 - 17:56 | 5369412 Bananamerican
Bananamerican's picture

Ok, now flip Ebay's charts up there....(something tells me things are getting lonely over there too)

Thu, 10/23/2014 - 18:21 | 5369504 cynicalskeptic
cynicalskeptic's picture

eBay is killing their customer base (SELLERS - who pay eBay)  with higher and higher fees - and hurting sellers with 'fraud' protection that too often encourages fraud on the part of customers.

But states are not helping by going after regular sellers even when they are selling USED stuff - you've got a lot of people trying to get by selling whatever they can - being pretty entrepreneurial actually - because it's the ONLY way left for tehm to make money.  Some actually buy things elsewhere that are being sold as bargains and resell for a few buck mark-up - eeking out a dollar or two on the sale.

Thu, 10/23/2014 - 19:02 | 5369712 zerozulu
zerozulu's picture

If customers got no money, no business can survive.

Thu, 10/23/2014 - 22:23 | 5370601 weburke
weburke's picture

as usual with amazon, short squeezing to the rescue.

Fri, 10/24/2014 - 03:06 | 5371240 allgoodmen
allgoodmen's picture

Ebay's fees haven't gone up in a while. However their fee structure is as Byzantine as the US Tax Code and when combined with their selling suggestions, can easily exceed 30% if you are not careful.

They get:

+Upfront fees (insertion fees)

+They encourage sellers to subscribe to "stores" which have absolutely no advantage in exposure, another upfront fee

+They charge their 10% on your shipping charges

+They discourage long-tail sellers with unique items, and encourage everyone to sell the same chinese wholesale commodity UPC  crap. If you have to relist an item that might find a buyer once a year, your listing fees can exceed your gross income.

+They are an advertising medium (that's how I write off their charges anyways) who think you are a franchisee subject to performance evaluations and the attendant punishments.

It's amazing our capitalist system can't generate a decent competitor to Ebay, but on second thought it isn't.

Fri, 10/24/2014 - 10:08 | 5371933 RKDS
RKDS's picture

Byzantine?  Really?

Sorry, this is like people crying over the monsterous difficulty of sales tax.  Sales X 0.06 = Tax.  How the hell did we ever send men to the moon and back if simple multiplication performed 1-4 times per year is stymying so many...

I agree with the rest, though, especially the franchisee part.  eBay has become such a micromanager over the years.  That "we're just a venue" line only applies if you need help.

Thu, 10/23/2014 - 20:31 | 5370108 daveO
daveO's picture

No sales tax on Ebay. Also, you can buy direct from China now. Look out Wally World!

Thu, 10/23/2014 - 18:15 | 5369497 cynicalskeptic
cynicalskeptic's picture

Ding ding ding..... We have a WINNER!!!!

While some people live in areas far from brick and mortar shopping, the great majority of people DO have good access to pretty much anything.  If you're in a large metro area you can now buy pretty much ANYTHING you want within a few miles.   BUT you are often paying close to 10% in local sales tax to do so.

The HUGE growth of online shopping may have been fed in part by consumers lacking easy access - those in rural and remote areas, and consumers seeking 'unusual' niche items but that is a SMALL percentage of the overall market.

The REAL growth in online sales came from serving ALL consumers - the total market.  That occurred because customers (even those with easy access to geoods locally) could pay LESS online , even with shipping.  A lower total cost may have partly come from a lower price - volume purchases at wholesale, lower overhead and such BUT the biggest savings for the consumer usually came because they DIDN'T HAVE TO PAY SALES TAX

('convenience' may be a factor - you can shop at your leisure from home - or work - BUT there are inconveniences too... You often have to be available to sign for high value items - or go pick them up.  It is increasingly common for items to be stolen when left by your door.  If you are buying somethign you havenot seen or handled, it may have to be returned or exchaned.  There ARE 'down' sides to online shopping as well.)

I live in NY and am regularly in Manhatttan.  I am a pretty serious photographer and have access to ANYTHING  I could possibly want in New York City stores - they are easy to get to and I can try out cameras and lenses in the store, hold them and look at them.   But NYC sales tax is onerous.

 I can BUY the same equipment online at the same low price I'd pay in NYC WITHOUT the sales tax and with FREE shipping.

Why would I pay almost 10% more when buying a $2000 camera or lens if I can avoid doing so?  I might buy locally if the sales tax was lower - and do buy small items simply to avoid waiting but I'd be stupid to give away $100 or $200 neeedlessly

I doubt this hurts places like B&H or Adorama because THEY are selling far more online to people avoiding sales tax in THEIR home states

The problems is that Amazon is a big target for states and they have begun forcing it to collect sales tax - smaller operations can legitimately avoid doing so because they lack ANY presence outside their home state.

Government EVERYWHERE is bleeding CONSUMERS dry with higher and higher taxes - while PRODUCERS often pay nothing.  So why wouldn't consumers try to avoid paying too?

Thu, 10/23/2014 - 18:46 | 5369650 holmes
holmes's picture

For a lot of people that convenience of shopping at home is a BIG factor. I hate going to the stores. Either they are out of stock or the store is mobbed. I will gladly pay the tax to Amazon so I can stay out of the stores.

Thu, 10/23/2014 - 20:01 | 5369988 williambanzai7
williambanzai7's picture

Because they listen to gospel music and Beyonce.

Thu, 10/23/2014 - 21:50 | 5370488 Wild Theories
Wild Theories's picture

The sales tax is certainly no help, but AMZN wasn't making money even before sales tax.

and they have overseas stores that doesn't have to deal with sales tax situation in the US, wasn't making money either.

Thu, 10/23/2014 - 23:21 | 5370796 RKDS
RKDS's picture

DIDN'T HAVE TO PAY SALES TAX

Are you serious?  Don't you know you're probably paying more in shipping than you would've paid in sales tax?

Fri, 10/24/2014 - 01:58 | 5371167 goldsaver
goldsaver's picture

Actually, hmmmm NO. I have Prime and get free shipping.

Fri, 10/24/2014 - 09:33 | 5371817 RKDS
RKDS's picture

So you pay for Prime and, therefore, shipping isn't really free, is it?  Outside of that, "free" shipping is almost always calculated into the product price...

Thu, 10/23/2014 - 19:33 | 5369858 p00k1e
p00k1e's picture

“drive down the street and buy the item in a brick and mortar store”

‘For every action there is an equal and opposite re-action.’

- Newton

Considering sales tax kills the amzn advantage and people do head to the locals, strip malls as investment, mall cafe plays and the like.  Mac Don’s is going away so the shoes will be filled.

Local robbery rates will climb so people will pack.  

Thu, 10/23/2014 - 19:57 | 5369964 Miffed Microbio...
Miffed Microbiologist's picture

I have Prime and get 2 day free shipping. Yes the sales tax was a major bummer but it still saves me more than going to a dept store. I hate to shop and not having to look at the people of Walmart is another major plus. Certain items are fabulously priced, others not so much. I've done a lot of my preps though amazon. They have their place and it would be unfortunate if they folded.

Miffed

Thu, 10/23/2014 - 20:14 | 5370038 WillyGroper
WillyGroper's picture

FWIW, I don't have prime & get most my stuff w/i 2 days via USPS. I too hate going to the stores, but I've noticed they're beginning to get the WMT disease in prices going up after the competition is wiped out. Many of their "sellers" are getting gouged. Used books have better prices on Alibris most times.

2 cents.

Thu, 10/23/2014 - 23:06 | 5370737 migra
migra's picture

That is what happened to me in California. Amazon sold out to the state and voluntarirly started paying CA sales tax. That meant a 9% price increase for me.  I don't buy from them much anymore. 

Thu, 10/23/2014 - 23:19 | 5370781 RKDS
RKDS's picture

Now, if I have to pay that 9% sales tax anyways I might as well drive down the street and buy the item in a brick and mortar store and have it that day.

Yeah, that doesn't work so well when the brick and mortar stores don't actually carry products.  Forget sales tax, _that's_ why I shop online.

Thu, 10/23/2014 - 17:31 | 5369270 James_Cole
James_Cole's picture

Yay another shit company getting a long overdue smackdown. 

Thu, 10/23/2014 - 17:40 | 5369323 TruthInSunshine
TruthInSunshine's picture

I like Amazon as a company and concept, and feel that they have excellent customer service.

However, even they, without the added costs of brick, mortar & land for retail stores, nor fragmented locations with inefficient employee headcount, and having the benefit of efficient, centralized, warehouse & inventory systems, are being eaten alive in terms of profits (lack of), and now, revenue, due to a massively overleveraged (now 6 years into re-ratcheting debt up) , and increasingly spending constrained (due to said re-ratcheting of debt levels upward) 90% of American consumers (some would argue 93% to maybe even 95% of American consumers will be spending "constrained" going forward, and I agree).

We're in equity "market" bubble v3.0 of the last 15 years (with simultaneous commodity, bond and RE bubbles).

If companies like Amazon can't even grow top line numbers thus far into a Federal Reserve and global CB liquidity tidal wave, how over-valued are the other negative book value super-performing, net revenue-less "companies" on the equity "markets," that have been ridiculous 5x, 10x and even 30x or 50x baggers since Bernanke began flooding the zone in 2008?

Suicide equity markets. Crash helmets.

Watch and observe how quickly and viciously phantom, illusory, equity "market" wealth gets obliterated and vaporized, again.

Thu, 10/23/2014 - 23:10 | 5370751 CrazyCooter
CrazyCooter's picture

TIS,

Not to be off topic ... but ... is that big, huge sentence grammatically correct? I had to read it three times (no one else would fall for that trick)!

I recall reading, a long time ago, about a competition amongst the English purists about who could write the longest sentence, shortest novel, etc. Novel, to say the least, but not of much practical value.

Just curious if you will weigh in on your behalf.

Oh, and I have to remember to check back tomorrow ... I am like a smart gold fish these days ... figuring things out ... and promptly forgetting them.

Oh, by the way, is that big, huge sentence grammatically correct?

Regards,

Cooter

Fri, 10/24/2014 - 00:19 | 5370988 TruthInSunshine
TruthInSunshine's picture

I am a huge run-on sentence offender of the worst magnitude.

Don't check back tomorrow, but over the course of weeks, months...

Central Bankers and Central Planners love it when they are able to keep people fixated on the short term, as it makes the task of distracting people from thinking logically about the meaningful term more easy.

Thu, 10/23/2014 - 18:00 | 5369430 klockwerks
klockwerks's picture

+1000 Cooter, love Amazon but wouldn't buy it's stock (or any stock). Use it often and love the prices

Thu, 10/23/2014 - 18:23 | 5369544 Pie rre
Pie rre's picture

I use Amazon to access items I can't find otherwise.  It's amazing, even in Seattle, how few computer components are available at shops.

Thu, 10/23/2014 - 19:22 | 5369810 Super Hans
Super Hans's picture

Yes! Most of f the time I can't find what I'm looking for locally. It drives me crazy!  

Even if I can find what I'm looking for locally, it often times costs more money than having it shipped from amazon

Thu, 10/23/2014 - 22:52 | 5370691 Plato's Law
Plato's Law's picture

N. Utah valley over 100k population.  If you're life depended on it you can not find electronics solder in this place.  Well, maybe 10' for $20 at Radio Shaft, but I'm not going there. 

When I need solder I shop on Ebay and am very happy with that choice.  Recently got a dozen NiCad AAA batteries from China (Ebay) for pennies on the dollar, and they arrived pretty darn fast too.  Rated 1500mAh, which they most certainly are not, but they are sill a honkin deal. 

Thu, 10/23/2014 - 21:58 | 5370508 Buck Johnson
Buck Johnson's picture

I got rid of my Prime because they didn't use it like they should.  I couldn't watch full seasons or all the seasons of shows I wanted and it was mainly being used for cheap shipping. 

Thu, 10/23/2014 - 17:15 | 5369158 aVileRat
aVileRat's picture

Yes, its starting to smell like Worldcom 2.0, lots of moving parts behind the scenes, none of them are profitable, lots of employee turnover, with tons of stock options being blasted into the market.

And yet somehow, with all these divisions and these record volumes of traffic, and zero legacy employment bennies dragging them down, they still can not turn a profit.

Its true target price, based on no insight other than price to earnings, and a comparison to a company with a real manufacturing/export business like Costco, is 10x. At best. Figure out what that implies for the company. If you use cash flow? 5.6x.

I can honestly see Amazon's global line item being a canary in the coalmine (ha!) for what is going to become of global trade.

The problem is so many big money funds own Amzn and BABA over their more traditional brick retailers, so like how everyone dogpiled into HPQ and IBM, expect a slow panic, all the while sell side bleats this company has excellent turnaround potential and is cheap on "earnings potential".

 

On another note, its companies like AMZN who focus on the "99%" and the QUALITY of their profits/guidance confirm that this is not a excellent recovery and without crushing the retail unit costs for consumers (including fuel), we would be in a full-out stagflation/paper recession. Given that AMZN is now one of the largest employers in most USA states, I wonder what and when the restructurings will start.

If Ichan has the balls, this would be the TWA/Getty for the history books: If Bezos is so awesome, howcome he can not make a buck on a single product ? if it's just because the market does not "get" amazon, then after 10 years, can Jeff tell the market which metric we should focus on ? Because every metric he is failing on for 4 years in a row now. If Amazon retail is so good, it should be spun off into it's own product line, and the cash should go towards his new push into "Apple Lite" or "HBO-lite", if not; the CEO needs to go, because this has 1970 conglomerate written all over it.

 

 

 

Thu, 10/23/2014 - 21:44 | 5370416 Wild Theories
Wild Theories's picture

it's what happens when a company is being funded by jet fuel from wall st, it no longer needs to consider silly outdated ideas like balanced budgets, positive cash flow, operating margin, and making cost/return analaysis before making a business decision.

 

Leverage me to the moon and plonk me down on the monopoly board as fast as I can, who cares about operating profits, we are going for a monopoly win, we are going to replace traditional retail, I'm a fucking genius, yay!

- Jeff Bezos inner dialog

 

I've being against the Amazon business model from very early on, it's a wall st funded monopoly attempt.

The free shipping and returns that costs more than the sales of the product could cover does not make business sense; the planting down of distribution centers irregardless of how many potential customers are in the area to make the return on the fixed investment worthwhile, or at all, does not make business sense; the growing size of massive inventories and storehouses and staff numbers because they are selling more and more mundane items of low profit margin vs inventory cost required(as opposed to their original idea of selling books which was high margin vs low inventory cost), does not make fucking business sense.

But of course, if you believe you are here to replace traditional retail, and you are going for the monoply crown, all you need is leveraged funding for a few more years, to plant down your monoply markers and cover the country, then traditional retail will die and the world will be your oyster, then yes it makes perfect sense.

Thu, 10/23/2014 - 21:55 | 5370498 TruthInSunshine
TruthInSunshine's picture

Short the living shit out of equities and short them hard.

Thu, 10/23/2014 - 17:11 | 5369161 Stoploss
Stoploss's picture

Gowhad Dahamn look at that margin!

Thu, 10/23/2014 - 17:50 | 5369384 Bumbu Sauce
Bumbu Sauce's picture

I cancelled my prime account when they took Jamie Gorelick on to their board.

Thu, 10/23/2014 - 18:29 | 5369573 Groundhog Day
Groundhog Day's picture

Maybe Cuban will step in and buy

Thu, 10/23/2014 - 16:53 | 5369040 IANAE
IANAE's picture

...it's alllllllllll over!

Thu, 10/23/2014 - 19:14 | 5369770 TheReplacement
TheReplacement's picture

Yeah, transitory until Bezos pulls back the suddenly and shockingly critical news coverage by WaPo since he bought it.  They have been more more, well, honest lately.  This is punishment.

Thu, 10/23/2014 - 17:44 | 5369353 slaughterer
slaughterer's picture

BTFD, maybe they will guide even lower on their CC.

Thu, 10/23/2014 - 20:17 | 5370051 williambanzai7
williambanzai7's picture

Thu, 10/23/2014 - 16:29 | 5368910 Lendo
Lendo's picture

They'll make it up in volume 

Thu, 10/23/2014 - 16:51 | 5369000 Squid Viscous
Squid Viscous's picture

Bezos is gay as a $3 bill, tortured soul... I pity him, no matter his net worth... the fire of hell will consume him

Thu, 10/23/2014 - 17:00 | 5369102 Say What Again
Say What Again's picture

There is a cure (or an app) for that.  Its called "Ben Gay."

Thu, 10/23/2014 - 17:06 | 5369126 pods
pods's picture

It's $1.99 on Amazon Prime.

 

Thu, 10/23/2014 - 17:07 | 5369137 Say What Again
Say What Again's picture

Does it show a picture of the Bernank on the web page as the seller?

Thu, 10/23/2014 - 17:26 | 5369238 Squid Viscous
Squid Viscous's picture

no it shows the last supper of gay tech titans, bezos, zuckerberg, chambers, etc

Thu, 10/23/2014 - 20:20 | 5370063 WillyGroper
WillyGroper's picture

No, no, no, Michele Bachman's hubby can pray the gay away.

Recidivism is "blown off" the charts. 

Thu, 10/23/2014 - 16:48 | 5369006 Beam Me Up Scotty
Beam Me Up Scotty's picture

Thats the whole problem.  You can price anything to sell.  Making money at it is another story.  Would you rather sell a million widgets and make a dime each?  Or a billion and lose a penny each?

Thu, 10/23/2014 - 17:19 | 5369208 XitSam
XitSam's picture

The WaPo profits will make up for Amazon.

Thu, 10/23/2014 - 17:28 | 5369250 kaiserhoff
kaiserhoff's picture

When the Redskins win a super bowl,

  as in when Hell Freezeth Over;)

Thu, 10/23/2014 - 19:17 | 5369781 DrewJackson
DrewJackson's picture

 

 

When Washington wins they will be named the Obamas.

Thu, 10/23/2014 - 19:17 | 5369776 Hal n back
Hal n back's picture

all the problems --its all about the money printed the last couple of decades. Investors are playing with funny money.

Its all about everything.it is not just AMZN.

Caterpillar----reports its 12 months eps of 6.56 vs 5.50 last year-up an astounding 19% when sales declined 3.5%.

First, we know buybacks and Cat buybacks are proceeding at buying back 16% of its outstanding stock. Thats good for a 16% increase in eps w/o changing a fricking thing in operations.

Then non GAAP and as far as I can tell thats worth 4% of increase in eps.

 

Third, and this is real--cutting back the capex. Now thats a real savings. I see a bit over a billion of reduction in capex. With 621 million shares-thats a buck 35 per share or about 20%.

 

Let's see, 20 plus 4 plus 16-so the "real eps was not 6.56 but closer to maybe 4 bucks, or a real decline.

 

Thing is, Tyler is recounting this stuff daily but the market barfs it up. The markets have gone beyond a joke and presents an incredible risk (add in AMZN here).

 

We have no growth, BS reported earnings--so if stockman is right that non gaap increased earnings by 25%, and buy backs by say 5%, and dumb cost cutting by 5%, then eps overstated by 33%--so thats a bogy of a 33% market decline from spx 2000 to 1333, roughly speaking. Then cut PE from 17 to what? 8.5 because there is no growth. Put SPX at 667.

 

Thats how Marc Faber and others come up with a 2/3 market chop.No need to count QE as its in these numbers.

That would happen if algo traders were concerned with real values rather than trading up or down to snarf profits. All they care about is riding a  few minutes of momentum several times a day.The algo traders will make money all the way down. Which will be volatile due to the algo traders.

 

AMAZON is funny-there are 2300 funds invested in AMZN-tells you all you need to know--nobody following fundamentals. Just need the greater fool to work out.

 

 

 

Thu, 10/23/2014 - 16:31 | 5368914 enforcer92677
enforcer92677's picture

As long as they don't go tits up and delete my wish list....

Thu, 10/23/2014 - 16:35 | 5368949 markovchainey
markovchainey's picture

I don't even know how to shop at a "real" store anymore.  They can't go under!  I can't deal with people!!!

Thu, 10/23/2014 - 16:46 | 5369001 synopsisTODAY
synopsisTODAY's picture

I even buy food from Them. I can't live with out Them. Maybe they should change their name to Them...

Thu, 10/23/2014 - 23:44 | 5370874 Bernankenstein
Bernankenstein's picture

Themazon

Thu, 10/23/2014 - 17:20 | 5369206 SHRAGS
SHRAGS's picture

As long as they don't go tits up and delete my wish list....

Join up to Librarything.com for onetime $20 payment, fantastic wishlist setup with a tags & private notes with links. Multiple booksellers (new & secondhand) & worldcat catalog searching supported.  Vastly superior to amazons wishlist system.  It even allows you to import your AMZN wishlist directly.  Can't recommend it highly enough.

Thu, 10/23/2014 - 20:21 | 5370067 WillyGroper
WillyGroper's picture

TY very much!

Thu, 10/23/2014 - 16:30 | 5368915 John Law Lives
John Law Lives's picture

Time to initiate a massive share repurchase program.

AmazonFUBAR.

Thu, 10/23/2014 - 16:33 | 5368921 Al Huxley
Al Huxley's picture

They should be more like the better operated companies on the exchanges and buyback more stock.  I'm increasingly convinced that the key to restoring America's industrial might and leadership is better stock buyback programs.  I see this as the only way to compete with high quality manufacturing powerhouses like Germany, and the massive cheap labor market that China is able to tap into.

Thu, 10/23/2014 - 16:35 | 5368946 Osmium
Osmium's picture

Time for a new Board of Directors.  They can approve a plan to borrow a billion or so and use it to fund the share buyback.

Thu, 10/23/2014 - 16:36 | 5368956 Lendo
Lendo's picture

Listen Al Huxley,

 

Your comment had me in stitches. 

Thu, 10/23/2014 - 17:03 | 5369118 Jack Burton
Jack Burton's picture

Me too! An excellent comment about the epic drive for US companies to buy back their stocks. But near earning season, they can no longer buy back, so watch their stocks as "buy back" stops for the earnings period upcoming. Regulations put a halt to buy back for a certain period before earnings.

Thu, 10/23/2014 - 18:16 | 5369500 booboo
booboo's picture

 "Regulations put a halt to buy back for a certain period before earnings"

Yea well they will suspend that rule too

Thu, 10/23/2014 - 20:26 | 5370081 WillyGroper
WillyGroper's picture

Really hate to be so thick, but what rules?

Thu, 10/23/2014 - 23:17 | 5370202 Christophe2
Christophe2's picture

Don't worry, we have a "constitution" that sets down a bunch of rules that everyone has to follow!  (Pfew!)

Thu, 10/23/2014 - 16:46 | 5369002 Bell's 2 hearted
Bell's 2 hearted's picture

Board meetings would be short

 

CEO:  All in favor of massive buybacks say "aye"

 

BoD:  Aye!

 

CEO:  Let's break for lunch and hit the links

Thu, 10/23/2014 - 17:52 | 5369394 steveharless
steveharless's picture

ALIBABA will be eating amazon's lunch real soon...and its price is cheap at 94 buckas a share....MUHAHAHAHAHAHHAA

Thu, 10/23/2014 - 18:22 | 5369536 cynicalskeptic
cynicalskeptic's picture

Watch it.  You don't want to offend our future Chinese overlords.

Thu, 10/23/2014 - 18:28 | 5369575 Pie rre
Pie rre's picture

I would have some reservations in giving them my credit card number.

Thu, 10/23/2014 - 18:39 | 5369622 Dazman
Dazman's picture

They probably have it already. At least you know the NSA does.

Thu, 10/23/2014 - 16:31 | 5368927 Jack Sheet
Jack Sheet's picture

Since when did data like that shown in the charts have any relevance for the share price?

Thu, 10/23/2014 - 16:48 | 5369003 max2205
max2205's picture

Don't worry its still a 800 to infinity PE stawk

Thu, 10/23/2014 - 17:08 | 5369146 CrazyCooter
CrazyCooter's picture

Fundamentals are like out houses; sooo last century. I mean, who needs fundamentals (or out houses).

Example:

Director 1: We don't have any outhouses? What do we do with the shit?

Director 2: Shhhhh! Not so loud. Ahem, we package them into stock certificates.

Director 1: What!?! (more quietly) I mean ... what? You mean our stock is shit?

Director 2: Yup. Literally.

Director 1: Brilliant! And people buy this?

Director 2: Even better, they *borrow* to buy more it.

Director 1: (calls broker) Sell all my shit!

Regards,

Cooter

Thu, 10/23/2014 - 16:33 | 5368934 Rainman
Rainman's picture

LOL .... maybe they just need to cut prices ...

Thu, 10/23/2014 - 16:33 | 5368935 Silver Bullet
Silver Bullet's picture

Perhaps they should stop selling their shit at a loss.

Or maybe one day Wall St. will care that they apparently never will.

Thu, 10/23/2014 - 16:41 | 5368980 Toolshed
Toolshed's picture

They need to stop building warehouses in every state. I use amazon about 95% less than when I didn't have to pay sales tax. I refuse to pay any tax I can avoid. How about you?

Thu, 10/23/2014 - 16:51 | 5369026 Berspankme
Berspankme's picture

Their incessant brick and mortar building is becoming a high cost model as well. You are seeing it in the margin space. They can raise prices and lose share and those facilities become a bigger albotross around their necks. I've never understood their model, seems like a dead end to me. It'sgone on longer than I thought it would. Being a middleman/order processor is a good low cost model but owning/operating a lot of real estate brings a lot of fixed cost that is really susceptible to volume swings. The declining wage base in this country makes everything so price sensitive. Oh and Fuck you Bezos you godamned Obama sack swinging prick

Thu, 10/23/2014 - 17:23 | 5369221 css1971
css1971's picture

Ah, see when you are a genius CEO, everything can only go up.

Thu, 10/23/2014 - 16:58 | 5369079 NoWayJose
NoWayJose's picture

Amazon started charging sales tax in my state - I closed my Amazon account last month. I can buy local and get clipped for sales tax - and have he product immediately.

Thu, 10/23/2014 - 17:43 | 5369349 Bad Attitude
Bad Attitude's picture

The problem of Amazon versus local brick-and-mortar is that the local stores have stopped stocking as much (reduced quantity and reduced selection) and I'm seeing a lot more inventory supply problems.

Forward (over the cliff).

Thu, 10/23/2014 - 17:01 | 5369104 Silver Bullet
Silver Bullet's picture

That is a good point, hadn't thought of that.

Thu, 10/23/2014 - 16:36 | 5368944 Squid Viscous
Squid Viscous's picture

BTFD, idiots because idiots like bill miller will, that is all, 

Thu, 10/23/2014 - 16:35 | 5368947 Seasmoke
Seasmoke's picture

Time for The Washington Post to write a pro Amazon front page  article. 

Thu, 10/23/2014 - 16:37 | 5368951 Best Satan in Town
Best Satan in Town's picture

The awful fire phone no doubt contributed to this a little.

Thu, 10/23/2014 - 16:42 | 5368960 ebworthen
ebworthen's picture

A search on Amazon for "Pokemon" yields 117,229 results.

No, I don't want "Prime", nor a Kindle.

Chipotle, save us!  VOYA (formerly ING) CEO on CNBC trying to hook the Millenials into the retirement Ponzi scheme.  Dear Millenials, three thoughts:  GM Bond Holders, MF Global, Cyprus.

Thu, 10/23/2014 - 16:39 | 5368965 Kurpak
Kurpak's picture

I live in Seattle, best news I've heard all year! All those freshly minted amazon employees can crawl back from whence they came.

Thu, 10/23/2014 - 16:40 | 5368969 RiverDrifter
RiverDrifter's picture

Well they just gave me $10 of free stuff if I downloaded their app and bought it from there.  SO maybe they're just spending money to make money.....?  

 

/s

Thu, 10/23/2014 - 16:40 | 5368973 Doug997
Doug997's picture

Bought a Generator from them a month ago about $1000 and free shipping. Best price around with the free shipping. It was delivered damage, nothing that could not be repair with a little work. I send them an email and photo, next day they tell me a new one is on the way and by the way just keep the damaged one as they cannot take it back. Great customer service but not sure if they made money on this deal.

Thu, 10/23/2014 - 16:44 | 5368988 ebworthen
ebworthen's picture

"Move that inventory!  We don't have the money to pay the return shipping!  Besides, it was from China, and they need to push inventory!  Break a window!"

Thu, 10/23/2014 - 22:54 | 5370692 jon dough
jon dough's picture

Now THAT is some first class Keynesian gibberish.

+1

Thu, 10/23/2014 - 18:25 | 5369560 cynicalskeptic
cynicalskeptic's picture

50% margin - the cost of stuff from China is appallingly low.  They lost on shipping twice - not much.  

The low initial cost is why some places simply replace faulty or damaged items.  Not worth the cost of fixing - that'd be higher than another 'new' one.

Thu, 10/23/2014 - 16:46 | 5368975 Everybodys All ...
Everybodys All American's picture

The financial engineering did not work for this company this quarter like at has for most others on wall street. If you look at any company and their stock price with respect to their buy backs you'll know exactly why this one is falling and why many others will fail just like IBM. If your buying back shares you have to have the stock price rising and not falling which in all liklihood is why they had to start coming clean with their financials.

Thu, 10/23/2014 - 16:50 | 5369018 RaceToTheBottom
RaceToTheBottom's picture

I expect that they will try moving to Ireland next....

Thu, 10/23/2014 - 16:42 | 5368979 himaroid
himaroid's picture

"The Rise of Amazon.com"

Just went to the top of bezos Wish List.

Thu, 10/23/2014 - 16:41 | 5368982 Kreditanstalt
Kreditanstalt's picture

And what actual, physical GOODS does this company produce?  You know, stuff that materially improves the standard-of-living of customers...?

 

What?  NOTHING???  Well, there you go...!

Thu, 10/23/2014 - 16:50 | 5369011 Eirik Magnus Larssen
Eirik Magnus Larssen's picture

Innovation. Admittedly, not of any groundbreaking kind, but that's the general principle.

Thu, 10/23/2014 - 18:45 | 5369641 pitz
pitz's picture

What "innovation"?  Amazon isn't a leader in literally any business line it operates in. 

Thu, 10/23/2014 - 16:57 | 5369063 Marco
Marco's picture

They reduce the amount of labour necesary to distribute those goods, reducing it's prices and allowing their customers to buy more stuff ...

Their problem, as well as the problem of the people making stuff, is that the demand side is drying up. We've hit peak consumption.

Thu, 10/23/2014 - 17:51 | 5369395 The9thDoctor
The9thDoctor's picture

Amazon doesn't provide goods, they provide a SERVICE. It's a marketplace that can help mom and pops reach a global audience with a very reliable supply chain.

I've ordered all kinds of goods made by small businesses on there.

Thu, 10/23/2014 - 18:13 | 5369488 Serenity Now
Serenity Now's picture

Books, too.  They decimated the publishing world's ability to control who gets published.

Thu, 10/23/2014 - 16:43 | 5368986 mikelongisland
mikelongisland's picture

How is the WASHINGTON POST doing ? 

Thu, 10/23/2014 - 19:44 | 5369913 kaiserhoff
kaiserhoff's picture

Lost money for a decade or two, like all print mass media.

 

Thu, 10/23/2014 - 16:44 | 5368989 Bell's 2 hearted
Bell's 2 hearted's picture

Dow +200 on CAT non event

 

Amazon will be swept away like it never occurred by market open tomorrow

 

what part of "fundamental" don't i understand??

Thu, 10/23/2014 - 18:15 | 5369495 Dead Man Walking
Dead Man Walking's picture

what part of "fundamental" don't i understand??

 

You're thinking too hard. Think of it more like FUN, duh, Mental.

Thu, 10/23/2014 - 16:44 | 5368991 Magnum
Magnum's picture

People are waking up and figuring out that they'd rather not spend money at Amazon.

Thu, 10/23/2014 - 17:06 | 5369128 NotApplicable
NotApplicable's picture

More like people pooring down and figuring out that their disposable income is all disposed on luxuries like food and fuel.

Thu, 10/23/2014 - 17:54 | 5369408 The9thDoctor
The9thDoctor's picture

...and their mortgage payments. That's the big bad elephant in the room.

Thu, 10/23/2014 - 16:46 | 5368995 ejmoosa
ejmoosa's picture

Amazunked....looks like you cannot make it up on volume.

Thu, 10/23/2014 - 16:52 | 5368997 ThisIsBob
ThisIsBob's picture

The reason these corporations are having bad sales (MacDonalds, Walmart, et al.) is that the owners and executives have taken most all the dough, leaving precious little for the empoloyees, who now don't have any money to buy their stuff.

Thu, 10/23/2014 - 17:01 | 5369106 Marco
Marco's picture

There's simply a surplus of labour and that is not their fault ...

Nor is it anyone's fault really, it's just progress ... unfortunately not the kind of progress our modern society can deal with gracefully.

Thu, 10/23/2014 - 16:47 | 5369005 MasterOfTheMult...
MasterOfTheMultiverse's picture

FATCA legislation in full effect!

Thu, 10/23/2014 - 16:49 | 5369010 Bell's 2 hearted
Bell's 2 hearted's picture

aren't they losing their sales tax advantage (at least in some states)?

 

been a while since i've ordered from them and can not remember whether i paid sales tax

Thu, 10/23/2014 - 17:11 | 5369156 NotApplicable
NotApplicable's picture

Still tax-free for me. However, every tax collector and their brother's complaining about "revenue loss due to the internet," so end days are obviously approaching (even though that's a red herring).

Thing is, sales taxes will be what "saves" Amazon, as they are going to be the one of a handful of entities with the ability to calculate/collect/disburse revenue to tax authorities globally. Which will then be sold as a service to other companies once they're all forced to collect net tax.

TBTF 2.0

Thu, 10/23/2014 - 16:50 | 5369012 disabledvet
disabledvet's picture

Might want to publish that revenue line while you're at it.  Not saying buy this thing but a twenty percent increase YOY on twenty billion is truly amazing.

This is easily the best retailer in human history and the folks who got in on the ground floor on this (including Bezos obviously) are still rich beyond belief.

I'd be more worried about brick and mortar on this news...not Amazon.

Thu, 10/23/2014 - 17:12 | 5369168 NotApplicable
NotApplicable's picture

Once they've fully automated the warehouses they can drop all of those expensive employees and start living large.

Thu, 10/23/2014 - 17:37 | 5369314 disabledvet
disabledvet's picture

Bezos is a multi billionaire.  I don't think this is his problem really.

And he does provide internet security for all you clowns who say he doesn't make anything.  Everyone ultimately buys something...since we are all Under Surveillance he probably provides the only thing of value left in our Eye Spy age namely "securing your customer's data."

Hard to put a price other than infinity on that in the Age of Blomberg and the  Psycho Senate.

Thu, 10/23/2014 - 18:18 | 5369508 Dead Man Walking
Dead Man Walking's picture

Just cut them down to 29 hours and put them on Obola care. That'll reduce expenses.

Thu, 10/23/2014 - 18:18 | 5369511 Serenity Now
Serenity Now's picture

+1 on being more worried about brick and mortar stores.  Sears and Kmart are closing stores all over.  Retail is suffering.  My prediction is that Amazon and Costco will the last retail stores standing.

Thu, 10/23/2014 - 16:50 | 5369019 Make_Mine_A_Double
Make_Mine_A_Double's picture

There are a 1000 specified websites for their individual products that are sprouting up for the most part incentivized by Amazon rectum destroying margins they charge on vendors.

I've bought all the shit I need from Amazon under the thought process "if you want to sell it at a lose I will take you up on it while it lasts'.

 

Thu, 10/23/2014 - 17:14 | 5369190 NotApplicable
NotApplicable's picture

Yet as long as they continue attracting "investment" from those near and dear to Yellen, losses don't mean quite so much. Especially after free-market capitalism is finally finished off, and Marx is portrayed as a visionary.

Monopolistic Cronies are gonna get paid.

Thu, 10/23/2014 - 16:52 | 5369027 Bituminoid
Bituminoid's picture

Drones I tell you, they are the answer. I'll shoot them down with my AA gun...

 

Thu, 10/23/2014 - 16:54 | 5369038 Bituminoid
Bituminoid's picture

How do I add a picture?

Thu, 10/23/2014 - 16:55 | 5369054 Dungholio
Dungholio's picture

Porn?

Thu, 10/23/2014 - 16:59 | 5369094 Bituminoid
Bituminoid's picture

No me shooting at the drones with my 5" deck gun

Thu, 10/23/2014 - 16:59 | 5369078 r00t61
r00t61's picture

Only select long-time posters/contributors have the ability to embed images directly in their postings.

 

Thu, 10/23/2014 - 16:55 | 5369051 buzzsaw99
buzzsaw99's picture

even at -10% amzn stock is still grossly overpriced

Thu, 10/23/2014 - 17:37 | 5369317 Bernoulli
Bernoulli's picture

Agree.

Should go to 30 USD.

But even then I wouldn't touch it with a barge pole.

Thu, 10/23/2014 - 16:56 | 5369052 Seize Mars
Seize Mars's picture

Profit? Whatever.
I'm a monkey's uncle if there isn't a big, fat repo trade buried somewhere in this business model.
Kind of like how all the petroleum engineers shriek about how skinny the oil business is, without understanding what a petrodollar is.
Or how GM is a bank that happens to make its own collateral.
Or for that matter how McD's is a realty company with little dependence on burger pricing.
See? It's all aggregate demand - otherwise known as carry trades.

Thu, 10/23/2014 - 17:00 | 5369092 PoorMan429
PoorMan429's picture

Lucy,  please esplain

Thu, 10/23/2014 - 17:16 | 5369196 NotApplicable
NotApplicable's picture

Infinite plate spinning.

Because ZIRP.

Thu, 10/23/2014 - 21:45 | 5370468 Seize Mars
Seize Mars's picture

Poorman

America is very, very financialized. There is very little work going on, mostly financial schemes. In my view, if you look carefully enough you will see many business models that are just excuses for some kind of financial trade, like Apple's 77 Zillion dollars, not producing goods but earning a few basis points of interest. There are other examples. It would not surprise me to learn that Amazon is not at all sensitive to books being sold but rather some kind of interest spread.

Capice?

Thu, 10/23/2014 - 17:06 | 5369091 Ned Zeppelin
Ned Zeppelin's picture

I use Amazon all the time, love the new Kindle,  use Amazon Prime and get free shipping, don't give a shit ithey charge sales tax (would have to pay it anyway) and think if they need to raises prices a penny be my guest. Anything beats driving to some shitty mall to shop for all this stuff, whihc half the time is sold by some idiot and/or out of stock.  No quesions asked retunr policy, and just the time saved alone, the usually smart and dead-on product reviews and the selection.  I don't have time to drive around to buy all this stuff in 10 different stores.  Are you factoring in your gas usage, wear and  tear on cars, etc.  Much more efficient to have UPS bring all this stuff to your house. 

Call me a fan, but as for the stock price, can't help them - it's too high.  They need to dial in a very modest profit and poof they are a utility if nothing else. 

Thu, 10/23/2014 - 17:20 | 5369209 NotApplicable
NotApplicable's picture

From a consumer standpoint, the only negative I see is UPS and FedEx outsourcing last mile delivery to the USPS.

Nothing quite like seeing an Amazon box rubber-banded to the outside of my mailbox (which is on a US highway).

Thu, 10/23/2014 - 17:29 | 5369249 Magnum
Magnum's picture

Amazon is a giant flea market with little supervision over who is fulfilling orders, and reports of a lot of counterfeit merchandise, and due to the high fees they charge sellers, better deals are available from other websites.  This is the truth that more people are figuring out.

Thu, 10/23/2014 - 17:38 | 5369322 laomei
laomei's picture

it's not even a good flea market to be honest.  most of the crap on the site is just sourced from alibaba and you can find the same exact thing on taobao for 10% or less.  there's your "economy" i guess.  wait to see what happens once the manufacturers decide to start direct sales and undercut everyone.

Thu, 10/23/2014 - 17:59 | 5369425 The9thDoctor
The9thDoctor's picture

"manufacturers decide to start direct sales and undercut everyone"

A world without middlemen. Is that bad?

Thu, 10/23/2014 - 18:05 | 5369449 MrSteve
MrSteve's picture

Tesla is finding it to be "illegal"!

Thu, 10/23/2014 - 18:27 | 5369569 Serenity Now
Serenity Now's picture

Most manufacturers don't have the time, money, or ability to be in sales.  Although the internet definitely makes it easier these days.

Thu, 10/23/2014 - 18:04 | 5369453 Bemused Observer
Bemused Observer's picture

My experiences with Amazon have been good, I've bought mostly books...That's the thing, it does what it does quite well for the most part. Why not just go with THAT? I got all my books within a 2-week time frame, and I was ok with that. I never felt that drone delivery within a few hours would vastly improve my experience. If the idiot had 'sold' this idea for delivering, say, emergency insulin to diabetics, something like that, it might actually have made sense, and could have led to other things. But no, he wants to fill the skies with cartons of consumer goods right off the bat...Another idiot is working on putting driverless cars on the road even though the obvious liability issues haven't even been ADDRESSED, never mind dealt with. Why do they have to immediately be put on the roads? Why not introduce this technology in a less flashy fashion, one that might actually WORK? Why do they all have to overreach, extend themselves into so many different and ridiculous directions? Obviously, it is to impress those shareholders, put on a good show, then pass the hat.
Meanwhile, the part of the company that DOES work gets neglected, downsized, cut back in favor of the offbeat stuff that sounds so innovative, but has no realistic chance of happening any time soon. Or it gets squeezed for profits to the point it is starved out of existence.

Thu, 10/23/2014 - 18:54 | 5369685 sleigher
sleigher's picture

Why?  Because this place is on the brink of failure.  The sooner they have cars that drive themselves, the sooner that car can drive you to the IRS office or to the police station for not paying your taxes.  Oh you wanted to go to the grocery store?  I am sorry, pay the complete amount now or be delivered to the local prison for work detail.

They want complete control of you and your body.  Stealing all your money was not good enough.  Now they want to hold the rat as it makes its way through the maze.

Thu, 10/23/2014 - 21:11 | 5370279 Bemused Observer
Bemused Observer's picture

You may have a point there...if there is a general sense that things are on the verge of collapse, that might explain the detach from reality...I mean, why bother if its all gonna hit the shitter anyway?
The idea that this is the desired result of some plan is inconceivable to me. It smells much more like desperation.

Thu, 10/23/2014 - 18:24 | 5369549 yellowsub
yellowsub's picture

If you don't know how to read reviews, typically lots of 1 star reviews and select from Amazon as the vendor then I don't know what to tell you.

Thu, 10/23/2014 - 20:26 | 5370026 Magnum
Magnum's picture

Consder this hypothetical possible situation from the vendor standpoint. Reviews are worthless if the author of a review praised the real product but the vendor who supplied the good product has been churned out because of the way Amazon's system is setup to pit vendors against each other.  Let's say you sell a Brand X set of gloves.  Great gloves, great reviews.  Amazon encourages others to ship the same product to their fulfilment center, because amazon makes money on storage.  Now there's a new vendor selling the gloves and he's a nickel cheaper.  Double inventory too, more money for amazon.  You report the problem and get a respnse from "Tarbash Kvansaur" that makes no sense, and nothing changes.  You drop your drawers and sell out what's there.  The new guy now sells based on your good reviews.  His product is also a counterfeit.  Now the reviews might go downhill or maybe not for awhile.  Amazon makes money either way as new vendors send more shit.  If you want Brand X gloves you can go find out yourself that its available elsewhere.  Totally hypothetical possibility and may not occur like this.  Fiction. 

Thu, 10/23/2014 - 21:42 | 5370445 Seize Mars
Seize Mars's picture

Tarbash Kvansaur? Is that like "Peggy?"

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