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Amazon Just Became Bigger Than Walmart: Here's Why
MThe moment everyone has been waiting for has finally arrived, by which of course, we mean the moment when the market cap of AMZN would finally surpass Wal-mart.
Just after 4pm Jeff Bezos' Amazon reported number that were quite impressive at first blush. And at second blush as well. Among these: a whopping blow out beat on the topline of $23.2 billion in revenue, an increase of 27% from a year ago, and far above the $22.4 billion expected, which in turn resulted in Net income of $92 million, or EPS of $0.19. The street was expecting a loss of $0.14 per share.
In terms of where the bulk of the growth and profitability came from, one word, or rather three letters: AWS (Amazon Web Services), also known as the "cloud", whose net sales soared by 81% Y/Y to $1.8 billion generating a 21.4% operating margin and net income of $391 million up from $77 million a year ago.
And while the quarter was good especially for AMZN the "web services" company, it was AMZN's forecast for the future that was even more impressive:
The company now expects net sales to be between $23.3 billion and $25.5 billion, or to grow between 13% and 24% compared with third quarter 2014. It also expects operating income (loss) is expected to be between $(480) million and $70 million, compared to $(544) million in third quarter 2014, although if the current quarter is any indicatiton this is some rather serious sandbagging.
But words aside: here, in three charts is what happened, with the company that now employs a record 183,000 people:
Worldwide net sales vs total Employees:
Q2 operating and net income in context. Clearly the quarter was an outlier - the only question is why and how?
And finally LTM Free Cash Flow. It appears Bezos does indeed have quite a bit FCF leverage if and when he wants it.
Again our question: why convert AMZN from a growth to a free cash flow model now: the last time the company tried this it ended up being quite disappointed.
For now, however, the algos love it, the shorts hate it and are scrambling to cover, and the result is an AMZN whose market cap has just jumped by over $40 billion to a record $268 billion.
And, yes, It is now far bigger than Walmart.
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All that churn for no profit.
"All that churn for no profit."
When one considers the markets are artificially boosted by the banksters' printed fiat, then there is profit, just not for the unconnected or unchosen.
Liberty is a demand. Tyranny is submission..
Now I feel left out. Nobody told me about this so I wasn't waiting for it and haven't been invited to any celebrations or parties.
I feel slighted and as I now identify as a slighted person I should have access to a comfort room and supplemental income.
Gimme gimme gimme
Im not seeing any GAAP vs non GAAP. I highly doubt that was a 'real' profit. Although the walmart vs amazon comparison is an apt one, at least in my case becasue anything I can get off amazon vs going somewhere like walmart, i do it. About the only thing that gets me in walmart is cheap ammo. with a prime membership, I can get a surprising array of things delivered without having to mingle with the dregs of society. Its used to be funny, but now its just infuriating.
I had to get a last minute item at WM earlier this week after not going in there for several years. It was one of the biggest, newest WMs in town, and at 4 PM on a Tuesday, the place was deserted. I even managed to get the closest parking space to the door.
As for Amazon, another area I expect them to eventually dominate is global sales tax calculation/collection/distribution services. With every government crying over "lost revenue," eventually someone will come up with a workable system. That someone will obviously not be some small mom/pop operation but a corp with massive scale.
Two things are certain in life: Death and plunder.
Liberty is a demand. Tyranny is submission..
So amazon is finally earning more than my paper boy?
Big whoop.
$91 million in 3 months. I think the New York Apple Store earns more per quarter. It's gotten to the point that a 20 year old company that is valued at hundreds of billions is killing it with a $91 million profit. Wow! I guess I just don't understand the "markets".
the amzn's and walmarts are designed to serve the lower class that is coming with the 3rd world invasion and the off shoring of the economy..providing low cost products for low income populations as the gutting of america and EU countries ..google is the eye seeing all for the reptiles who planned all this..I am amazed so few see the connection to the redesign of the west and the consolidation (monopoly mega corp ownership of production)..amzn's and walmarts must exsist for this to work. oh and no coins and paper money, try paying your amzn bill with cash.
Since William of Orange there has only ever been one Corporation. Maybe even since Akhenaton. One malevolent, corrupt from the head down shoddily run corporation. The Corporation is getting better, but we're going away.
A Shipping PONZI scheme is what Amazon is.
When Amazon was first starting, one of the brokers was trying to tell me why it was such a big deal. Because they didn't have to invest in any infrastructure.
You know, the shit you order just fucking appears on your front doorstep out of the replicator from heaven.
Not that it justifies the insane valuations, but Amazon Web Services is really where it's at for AMZ. You've basically got 3 companies that have the Data Center Cloud thing locked down. Google, Microsoft and Amazon. Google and Microsoft are of course pushing their own services and solutions and to whatever extent customizing them to integrate to 3rd party stuff. Amazon is basically offering the Data Center for rent to do whatever you want or need. Netflix runs on Amazon Web Services. Any start up that needs bandwidth and reliability is going to run on AWS. The retail shipping side losing money or breaking even is probably fine by them. Amazon is looking at a future of BEING the internet. At least as far as cloud services and the like.
Amazon AWS runs heavy-duty applications like Netflix like you said. Does anybody know if Microsoft or Apple does the same thing or do they only offer cloud storage? Having the capability to underpin Netflix is a different business model from storing cat pix or your kids MP3 files.
maybe that's just how it's reported...
It was already up $50 in the two weeks leading up to today's earnings and near all-time highs. After hours, it tacks on another $80.
So these numbers warrant a 25-30% move upward in two weeks? All because of free cash flow, which is known to fluctuate wildly?
It's a TWENTY year old company, not a start-up.
And still waiting for meaningful, sustainable earnings to emerge. WTF?
Quarterly earnings of $0.19 a share and the stock is now trading at $570.
IMHO it would be a "bargain" at $5.70 - but at $570, not so much.
You get a free bubble with your Prime membership, fits right over your head.....
What? No one likes a 4 digit P/E???
Correction: You get a free bubble with your Subprime membership!
I am milking my Amazon prime membership for all it's worth....to the great detriment of my local retail box stores...so the Walmart comparison makes sense.
What doesn't make sense, ever, is a p/e measured in the thousands...or even at 750 if I multiply 0.19 x 4 and divide into 570.
Sorry....love the free 2-day shipping, still won't buy ur stawks.
not to mention .19 is a *single* data point.
What is lost in the distortion of share prices caused by all these "liquidity" hijinks is the definition of "what makes a good company versus what makes a bad company".
Personally, I think Amazon is pretty amazing at micro distribution / customer fulfillment of both real and digital goods. That Amazon does not really manufacture anything does not affect my favorable view of the company itself - it is a horizontal fit in the manufacturing marketplace, not a vertical one. Huge volumes of product clear through Amazon and at costs to the consumer that compete very well with the 15 minute drive to a brick and mortar to play the what-I-want-at-a-price-I'd-pay availability gambit. IMO they ought to have a toe hold in the fulfillment space. The future of consumer goods distribution is micro distribution.
Again, the shame is in the stock markets, that make winners look like losers and vice versa. You'd have to be either and insider, a wily mfer, or completely out of your mind to play in this game.
I agree, I do not own amazon stock nor any of the other bubbly tech giants, but I do have a prime membership and do use it a lot.
That almost 70% short is gonna leave a mark.
I think the 67.70% was the amount held by institutions, not % short.
I'm ready to buy at the top... where do I sign?
The Blow-off phase...?
Im writing a movie script about the future.
Everybody drives Tesla's ordering stuff with their ipads on Amazon.
Should I ad some mild to hardcore porn?
Great! A sequel to Idiocracy.
"Idiocracy 2.0: Utopia"
Liberty is a demand. Tyranny is submission..
Yes to the pron. The harder the better. Maybe they could all be buying tighter twats and bigger dicks on those iPads while driving Teslas.
I just bought a new kidney with free shipping, Amazon Prime rocks.
Tell them it doesn't work right. They can't take it back so you get full refund and get to keep the "defective" kidney. It works with generators. Once you put gas in it, they can't take it back.
Thanks for the tip,
but how do you know this? :)
Yes, I mean of the numerous things that I've been waiting for, this certainly tops the list.
We all have our bucket of wish lists.
I can't wait to see the cats and dogs rip the snot out of those delivery drones.
is this good for stawks????
Amazon deserves its high market cap. Walmart is feeling the pain and is why they've been opening Neighborhood Walmarts to change their tune (and they are even opening kwik e marts at gas stations i believe)
amazons next venture will have to be finding a way to turn itself into a full fledged grocery store (milk, fresh meat, etc). they sort of do this already, but nobody realistically does their grocery shopping on amazon.
Dont forget Walmart's side deal with DHS, that's gotta help with revenue. Wonder how much they were paid for having "plumbing problems".
wow their p/e went from negative infinity to a mere 2500X in a single quarter. that's nearly a positive infinity improvement. IMPRESSIVE!
Impressive and suspicious
http://www.nasdaq.com/symbol/amzn/pe-ratio
Up 17% after hours. Shorts are getting their asses handed to them.
With breadth this poor, overnight index positions on days when AAPL or AMZN report is close to a red/black roulette bet.
Like with APPL a few years ago, by quarter-end nearly all large mutual and hedge funds will have window-dressed so much, many will report AMZN as their sole holding.
These numbers suggest that everybody's using it every day - all day. I don't profess to know everybody, but i know a lot of people, and few of them are AMZN shoppers. They use it for pricing and pictures and shit like that.
Fact is, I simply don't believe those numbers. And thats all I'm going to say - I'm taking my ball and going home.
that's because the people you know are still buying newspapers in 2015. your generation is a dying breed.
Oh I get what you're saying HHH, and for the record, I didn't down vote ya. But even the young people - fuck I aint seeing it. If it was really that heavily utilized as the numbers would suggest, then surely I would see and hear more about it. Lastly, i don't buy newspapers and it was my generation that created this fucking monster, soat the end of the day, I don't really know wth you are talking about.
Many people that I know DO use Amazon, so that pretty much puts us back at suare one.
And for all the newspaper readers down voting, just remember; you wouldn't have even read an article on Amazon's earnings until the next morning...
I shop and buy everything non-food online. Amazon.com is the conduit for probably 80% of my purchases. I absolutely love it; however, I do get pissed and look to rerout orders if I see tax charged. Screw the sociopaths. They steal too much of my earnings as it is.
my amzn...today I bought 3 items for $26 total. 2 delivered free to CA and 1 to NY. No need to leave the house. Last week bought a $45 mp3 player. Cheaper than Target, no sales tax. Delivered free, the free pickup on return. Making money is not their objective. Just increase sales. Wall street loves it. Amzn makes my life easy so I love them. No matter the item they always have it and deliver it free and its cheaper than Walmart and Target.
Walmart is like Hooli and Amazon is Pied Piper.
tempo fuck you-& any your types buying from .gov-r amzn - cia - dhszn..you don't get it this co will eat your childrens future. our culture is committing suicide via internet.
a co that never made a yr / yr profit if not for the FED and .gov same as google these are the co's owned by and run by the reptiles elite/.gov snakes..but your type wouldn't give a shit ..you buy things cause your a brainwashed consumer taxunit shit for brains.
The irony, to me, is that the very device upon which I'm reading your reply on a semi-anarchist website was purchased at Amazon. Using the same Internet you used to reply that is causing us to commit cultural suicide.
I'm not saying you're right or wrong. Just ironic.
brooks don't worry soon I will be banned or sites like ZH will be changed to "hope and change echo chambers"..
much like most broadcast Msm networks best example cnbc and msnbc and more recent fox.
the seeds of the destruction of all this is in the design that the reptiles cannot change, perhaps one day most will choose to not be connected as they stomp on the iphones and pads and what not.
Don't sweat being banned, OM. I'm on my second life here, and figure if I want to stay I'll probably end up with a third.
As for the technology, we are Luddites. I embrace that. This weird world will be left to those who are far more comfortable (or ignorant) with it than I.
Neither of you will be banned. Everybody who ever posts anything on zh will be picked up for reeducation. We're all going to have jobs at SoylentCo.
Even that guy whose sister makes 1789 a day rubbing her yayas and hoohoo into her webcam.
A week ago on vacation I bought an item from Amazon to be delivered to my home, using an Amazon CC and Prime. It was there when I arrived. Yesterday I saw a book I wanted, I ordered it. The "Rewards" from the previous purchase covered the price of the book, except for 85 cents. The book arrived at my doorstep this afternoon, so quiet I didn't hear the truck, although I got an email telling me it was out there, and sure enough, it was. How they make money selling a $5.35 book for 85 cents and shipping it overnight "for free" [I have a promotional Prime membership for a year] I don't know. Maybe if they sell a few million more books for 85 cents shipped free overnight they will be the richest fucks on the planet.
Centralized web services, lol.
*Distributed centralized web services.
Still a lol, though, as there's always a layer of centralized control, regardless.
In other news, we routinely block AWS IPs as their customers are always hitting our web servers in bizarre ways. The last one claimed to be "monitoring twitter streams" by repeatedly hitting one of my form submission pages 20-30 times in a minute.
AWS is the quintessential eggs-in-one-basket. Can you imagine the impact that a systemic cascading failure would have? Availability zones my foot, they're all running on the same underlying architecture.
Hammering is for Chinese Universities.
I'm still waiting for amazon to make $15 a share per year. Amazon servers (I mean the cloud) may make $3 per share in the future. Where is the other $12 coming from.
Anyone buying here deserves what they have coming.
Yeah, like their pick of any college they want when their 2-yr-olds grow up.
Wouldn't short this for les than $800/share. This stock could get stupid.
So like I said they made $390 million this quarter from the cloud. For a year that would be $1.6 billion a year. Divide that by shares outstanding and you get $3 a share. Since it appears that being a middle man will never make them money unless every other retailer is long gone $575 seems about $400 to high.
This is not some start up company and if and that's a huge if, they'll never earn anything close to $15 a share which at this price would still put them at a PE around 40.
Bubbles will be bubbles.
The cloud is a race to zero with IBM, Google, and others quoting lower and lower prices. Whoever offers free cloud service will eventually win lol
IBM has lost the cloud. It will be a race to the bottom between AWS, Azure, and Google. Cloud margins will accelerate in compression.
And for each player, when the razor thin margin leads to a cost-cutting induced outage, it's game over.
They will each claim a layer of the market. IBM has shadow government & GS type darknets, AWS has Oracle type MNCs, Azure has companies who can't figure out AWS and Google has a pretty ignorant single purpose hive mind continuously nibbling away at Microsoft's base until the subject is dead, wholly digested, as decreed by the fair and unbiased globalist looters and msm worldwide 15 years ago when they ordered the Wet Nurse on board.
Fuck Lawyers.
I guess thats going to be a federally subsidized private multinational Interpol front with the board loaded with rabid maddog pimps.
Your critical business information in the "cloud". Sure. Right. Free as IRS debt serfs, too.
Take some more of these kupons.
"Bubbles will be bubbles."
Going back to just the "Tulip Mania," and moving forward, one will find that all so-called "bubbles" are fueled by money manipulation, plunder, of some sort.
So, "Plundering will be plundering."
Liberty is a demand. Tyranny is submission..
What's the P/E ratio now as opposed to normal?
amzn's ideal customer posting here are bots.
If this is such great news, then why is not Amazon hiring? That is, hiring enough people. Case in point ..
IT Support Engineer All times are in Central Daylight Time. Job ID 297415 Location US-TX-Austin Posted Date 12/8/2014 Company Amazon Corporate LLC Position Category Operations, IT, & Support Engineering Recruiting Team North American Teams - Consumer - Tech Your application was submitted successfully. Thank you for applying. To return to our career site, please click here. <img height="1" width="1" border="0" src="https://conv.indeed.com/pagead/conv/9247441117420220/?rand=1437685929944..." />Your application is already on file for this position. While we are working on it, you are welcome to apply to any other open position.
So, we have been working on your application since December 8, 2014. Boy, is that comforting ..
Are you Indian and eligible for a H-1B visa? If not, then you're probably not going to be working at Amazon as an IT Support Engineer.
One could take the analysis of Walmart and Amazon further.
If you run a ponzi fraudulent-reserve banking and plunder scheme and wish to have it continue as long as possible, you must forestall the inevitable price-inflation. You can do that by exporting your printed poison as cheap capital, and then control exchange and interest rates. However, you will need to jump start the process of selling massive amounts of imported goods in the American country. That is where Walmart comes in.
You foster a small unknown retail firm, with hidden Jewish ties, up into the big leagues, use its supposed poster-boy American founder to push the lie of "Made In America" for you, and then inundate this firm with your printed fiat via your partners in crime, the streeters. The sheeple will unwittingly snap up all of its wears, and the firm's success will then push its competitors to then also start sourcing overseas.
However, when your plunder has nearly run its course, you then must promote another firm with a lower cost structure than the first. Though not profitable in the traditional sense, this firm will allow you to continue your fiat plundering a bit longer, and also allow you to consolidate more control, power, to you over retailing to the sheeple.
This then allows you to work hand and hand with your banksters, and their violence-puppets, government, to enslave, in various ways, the sheeple to you, the de facto "government store."
Your profits accrue to you hidden in the channels of your banksters' fiat and associated fiat-debts pushed to the sheeple. You may also profit by periodic sales of the over valued stock of these firms. Sales then covered up by your banksters and their streeter partners.
Liberty is a demand. Tyranny is submission..
If you don't see Zion, you've missed the forest.
nice, I want to start a religion of money now
they might want to make a move into making their own tv shows and/or movies like netflix...
Personally, I love amazon - almost never had a problem, and when I did, they were all over it.
I don't doubt they're over-valued and in some trouble... but look around...
It's also amazing that Amazon has not been taken over by the usual suspects, if anything to stop the sale of certain books - probably coming at some point...
Amazon is owned by the kike roach Jeff Bezos.
I junked you for the superfluous, needlessly pejorative 'kike'
Not clear to me he's Jewish
http://www.worldjewishcongress.org/en/news/don-t-sell-books-that-deny-th...
Don't really care - he's not some ardent Zioturd or Israel Firster, so I don't really care which building his grandparents went into to worship their invisible playmate in the sky.
As it stands, Amazon has resisted a lot of pressure from Jewish [and other] groups to remove certain books
http://www.worldjewishcongress.org/en/news/don-t-sell-books-that-deny-th...
And for the most part, Amazon seems to have stuck to its free speech guns.
That's commendable, in my book. [I don't even entirely buy the 'revisionist' dogma...but I'm 1000% in favor of free speech]
Why isn't it in yours?
You don't think Bezos and Schultz (starbucks) give lots of cash to Israel?
SMDH.
i dunno aout Bezos doing much of anything re israel.
seems safely libertarian
http://www.alternet.org/media/what-will-washington-post-be-under-jeff-bezos
http://www.theatlantic.com/politics/archive/2013/08/the-politics-of-new-...
biggest crticism I have is he didn't fire the reprehensible Jennifer Rubin, who is such a Zio shill as to lack any intellectual merit
http://mondoweiss.net/2013/08/what-will-bezos-do-with-aipac-all-stars-of...
I see they sell German helmets there, perhaps I can list my single decal SS worn by a iron cross winner, ebay deleted my listing for BS reasons.
Openbazaar is coming. I've only read about it and haven't used it but they are targeting ebay users.
Too bad you didn't see the documentary on how they treat their workers (slaves). its downright disgusting.
It wasn't biased in any way was it?
Careful now, you'll be accused by the local rabid achmeds of being a talmudist kiddie fiddler or sumpin...lol.
I take BDS seriously and do my homework. I won't buy from Amazon, you can actually get lower prices if you spend more time shopping.
And NOW we have NON Zionist Amazon type stores popping up here in Europe. Same low prices and free shipping. The other day I actually saved over 20 euros compared to Amazon price.
They do make their own TV shows etc. Go to amazon and look.
What matters is Revenue. Amazon is very far from catching WalMart in terms of Revenue.
Walmart Net Revenue - Taxpayer Appropriations = 5.6 - 7.8 = (-2.2B) not counting the casualties and damages inflicted on actual US citizens by their parasitic beneficiaries and their riots, and exhausting the medical system, and overwhelming the education system with gimps and tards, and overwhelming the justice system, and exhausting all government services.
Thats how ratfuck Krugman defines Revenue. What kind of cigars do you engineer, Swisher Sweets?
*winning*
Probably smishers.
Does Amazon qualify for near zero % financing for share buy backs? Where's Ichan
When will they take over WMT?
I go on Amazon to look for an item but never buy it there. I read the reviews and then search furthur sometimes to the factory and get the LOWEST price. I won't give that kike roach or ANY kike roach any of my money.
Same goes for the kike owned Starbucks. I can make 30 cups of expresso at home for the same that they charge for one coffee.
but where do you bank?? Got you there!
ABN-AMRO
My brothers name is Gerrit. (wink) and my name starts with a ''D''.
BTW , I know where Gerrit lives.
Dirk?
Possibly :-)
Dirk?
Dirk Pitt!?!
BTW, Gerrit is member of the Dutch Reformed Church (protestant)
Saw a documentary on BBC a few months ago on how Amazon treats their warehouse workers. Like fucking slaves. they have a certain number of seconds to retrieve an item and if they fuck up it is cause for dismissal.
Fuck Jew Bezos.
Amazon loses about $1.5 billion a year on shipping. That's not a sustainable business model when they are already working on slim margins. If they raise their shipping rates, then their sales will drop substatntially.
That's why Amazon has been experimneting with their own shipping services.
Once the opposition is destroyed and the intended monopoly is achieved, the prices of goods and delivery can be 'adjusted' appropriately.
Lots of Amazon type websites here in Europe starting up. Same deal. free shipping , supposedly lowest prices but if you delve deeper you can find lower prices. Most people don't take the time because they think Amazon is the lowest. so stop there.
True.
Amazon is 10-20% higher on rifle scopes than other sources.
So if ZH opened a fund... what kind of return would we get, and would it short gold?
Amazon prime is shipping my sons new mattress via 2 day air, for FREE, and we are in Hawaii...!!
I hope AMZN can make it with AWS because JET.com is going to smoke Amazon in the retail space. If you haven't taken a look, go get a free 12-month membership (JET's version of PRIME) while the codes still work.
Source: http://therewardboss.com/2015/07/22/free-1-year-jet-com-membership-testi...
MICROSOFT failed, but GOLDMAN worked. The Tribe code test.
Jet is a complete and utter scam. Investment ponzi grade. There is no business model there!. It's over, Amazon owns general ecommerce.
I can't disagree with you, time will tell if Jet finds a niche. While Amazon is very good at ecommerce, they don't have a unique formula. Any competitor who can match Amazon's logistics would make a significant dent in Amazon's revenue.
What Amazon and others of their ilk have done is create a lot of jobs in parcel delivery. Here in Netherlands , Fedex, UPS and DHL are already contracting to independent guys with vans, Seems like all I see are delivery trucks on the road.
A friend of mine ordered a bike thru Amazon.DE (german Amazon) . ordered it at 5 pm and it was delivered by 11 AM the next day,
bullish for walmart
I guess all those empty malls will make great detention centers.
What this site does it takes you to the top 5 cheapest places to get the item you want, then you buy from them,
http://www.kieskeurig.nl/?utm_source=keiskeurig.nl&utm_medium=parkeddoma...
Tyler, I think you may have beat me to the punch on this one, but I am reposting this post to another one of your articles because it is also relevant to this article.
----------------------------
Tyler, I know you have your own plan for what articles are important and what aren't.
But in my humble opinion the following results:
"05:14 PM EDT, 07/23/2015 (MT Newswires) -- Amazon reported Q2 sales of $23.18 billion, up from $19.34 billion in the year ago quarter and well ahead of the analyst consensus of $22.4 billion. Operating income was $464 million, a swing from a year ago loss of $15 million. Net income came in at $92 million, or $0.19 per share, up from a year ago loss of $126 million, or $0.27 per share."
and the resultant after-hours pop from $482.18 (at close) to approximately $564, a 17% increase, to a current quarter multiple of (.19*4/564) of approximately 764, up from a loss last year, is ludicrous. This announcement explained the complete Nasdaq 100 after-hours futures claw-back, as evidenced by the fact that neither AAPL and GOOG participated to the same degree in after- hours trading.
If there is anybody out there who still thinks Nasdaq 100 is not living on borrowed time, please let me know.
most of my business is a shipping operation. we have low staff and high volume. what amazon does with their Prime members and the two day shipping is nothing short of remarkable
things should get a lot cheaper in a few months... plus free shipping...,..
Lets look at some back of the napkin math. Quarterly EPS of +0.19/share equals annualized earnings of roughly 0.80/share. With a current price per share of $566, we have a PE of over 700. This stock went up 18% today!! Am I missing something??
looks like AMZN has gone to "a permanently high plateau"
Jeff Bezos is brilliant - more so IMO than that Musk guy. Consider:
1. Starts a company with a niche (books on low to no margins) and owns it. Proof of concept.
2. Expands that into every other consumer product on the same low/no margin plan to become THE online marketplace.
3. Uses the cash flow and investment capital to scale the biz to a point no one can compete with him. It's a scale + margin deathtrap to anyone who tries.
4. Knows he can turn the profits on at any time but instead invests in a complementary business with huge potential margins - cloud.
5. Has now scaled that business to be difficult to compete with - while every one else with the same infrastructure (FB, MS, Yahoo, etc) has it but only to host their own content.
6. So now the guy has the ability to monetize the tech infrastructure AND the marketplace. No else has done anything similar.
7. What's most interesting is his next play. Will he turn on the cash spigot or re-invest in the next market-leading sector? Either way, this guy is a horse you'd be foolish to bet against, IMO.
Maybe... but he should be pelted with rotten vegetables and cow pies in the public square over the stupid drone thing.
http://tinyurl.com/pgdy7nc
Only problem is, the "we're not making profits because we're investing so much" is nonsense to anyone who knows about accounting. The "investments" simply are not large enough relative to Amazon's size to generate sufficient write-offs to justify the losses in other aspects of Amazon's business.
Walmart has 5x the revenue and 6x the profits of amazon. Just saying.