Amazon Stock $100 Away From Making Jeff Bezos World's Richest Man

Tyler Durden's picture

Last Thursday, when AMZN stock - currently trading at some ridiculous four or more digit P/E multiple  - made its latest spurt higher, we reported that as a result of the move, Jeff Bezos was now richer than Warren Buffett and fast approaching Bill Gates.

As a reminder, just last Wednesday Bezos added $1.5 billion to his net worth, the day after the e-commerce giant announced it will buy Dubai-based online retailer Souq.com, and has added over $7 billion since the global equities rally began following the election of Donald Trump. As of last week, Bezos had a net worth of $75.6 billion based on the Bloomberg Billionaires Index. That’s $700 million more than Berkshire Hathaway Inc.’s Buffett and $1.3 billion above Ortega, the founder of Inditex SA and Europe’s richest person.

 

That said, as of last Thursday, Bezos remained just over $10 billion behind Microsoft co-founder Bill Gates, the world’s richest person with $86 billion.

But not for long, because fast forward less than a week later, when following a number of more sellside upgrades, Bezos is nearly there.

The latest catalyst: a "research" report from BMO's Daniel Salmon who upgraded the company to BMO's Top Pick, boosting his price target from $900 to $1,200. The alleged catalyst: Amazon is next set to challenge Google on its advertising business, to wit:

In this 46-page report, we examine a significant emerging opportunity for Amazon: advertising. We believe Amazon's ad business is gaining significant momentum, will reach $3.5B in revenue in 2017 (up 65%), and is increasingly being driven by the native, CPC ad product, Sponsored Products. We believe this high margin revenue can buttress our thesis around "investments while growing margins" and could be a greater catalyst for the stock if management shares more data points on it.

 

We believe Amazon will take share of marketing spend from 1) Google, 2) Facebook, 3) other online direct response budgets, 4) offline direct marketing, and 5) retailers' trade promotion budgets. Amazon is early in its video strategy, including around premium content, so we do not see branding/television budgets at much risk today, though we expect this to ramp in the years ahead. We believe Amazon's advertising business could have adjusted EBITDA margins in the 50%-70% range and is very accretive to total company margins. We believe the advertising business can be used to offset investments in other areas of Amazon's business (price, Prime content, India, etc.) while expanding margins.

 

Valuation: We are raising our price target from $900 to $1200 owing to higher estimates and a higher target multiple due to the early stage nature of the high margin ad business. Our new $1200 price target implies 27.1x 2017E EV/adjusted EBITDA, versus our prior 20.7x 2017E EV/adjusted EBITDA.

 

How does Salmon get to a $1,200 price target? Simple: by using a 130x P/E multiple.

While it is easy to dismiss the recent surge in analyst euphoria as nothing more than lemmings chasing momentum to the upside, the outcome for the stock is clear, and as of this morning, AMZN is up another $6, or 0.7%, with the stock trading on top of $900, up $25 in just a few days, and cutting the net worth spread between Bezos and Gates by 20%.

More notable is that should Amazon hit BMO's price target, as explained last week that would make Bezos the world's undisputed richest man. But it doesn't even have to rise that high: in fact, AMZN is now just $100 dollars away from the key $1,000/share level at which point the owner of the Washington Post would surpass $86 billion in value and - assuming MSFT stock does not rise in tandem - would make Bezos the world's richest man.

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Takeaction2's picture
Takeaction2 (not verified) Apr 4, 2017 10:53 AM

Still want Health Insurance through my PRIME Account. Come on BEZOS...get Rand Paul...partner up...do it right.  Can you imagine?

.

Loving CNN and MSNBC trying to spin the SUSAN RICE/Obama Bombshell.  HAHAHHAHA...nice try. 

tmosley's picture

Value on paper is a most etherial thing.

Try to sell those shares and see what happens.

froze25's picture

He maybe the worlds riches man by personal holdings but the real wealthy people of this world are the beneficiaries of monstrous non-charitable /charitable Trust. Those people make him look poor. Think Queen of the Netherlands and the Queen of England or the Rothschilds. And to the is day, the Queen of England owns all of the Land that makes up the United Kingdom, the people only have Title in Equity. Same here in the US, that is how they can make you pay property Taxes.

Raffie's picture

I have Hawaiian style pizza with jalapenos on it last night and made tomato soup.

Dip the pizza into the tomato soup. What a great treat I did. You have to try it.....

 

 

 

Oh ya, umm.... good for the Amazon guy I guess, stuff like this has no bearing on me at all.

thesonandheir's picture

Bezos has spent the last year insulting the Don and he repays the favour by making him the richest guy in the world? 

 

Disappointed here by the Trumpster, was hoping he would break AMZN up to at least save US bricks and mortar retail.

spastic_colon's picture

he also has janet buying AMZN in an effort to help him afford the wash post as payback for being a good lib and allow him to spew the narrative as he's ordered.

Abitdodgie's picture

Please he does not come anywhere close to Rothschild , wtf.

Joyo Bliss's picture

I know

Rothschild was worth 50 trillion USD back in the 70s or 80s or something

This is a puff piece

Mtnrunnr's picture

How do rich people get rich? By fucking over normal people and being given massive advantages. If he gave one. Single. Fuck. About insurance or people who need it, he could set up his own hospital chain in every state and create his own health insurance system. He doesn't care about you and he's making a killing taking advantage of you.

DuckDog's picture

I love buying stuff from Amazon that I pick up broken from garage sales, swap them out and request a return... I absolutely love doing this...

DuckDog's picture

I love buying stuff from Amazon that I pick up broken from garage sales, swap them out and request a return... I absolutely love doing this...

biker's picture
biker (not verified) Takeaction2 Apr 4, 2017 3:58 PM

 

Amazon is the globalist illegal alien employment leftardist factory opearted by the non-tax-paying enemy of the people cunt bezos whos fake shell companies operating out of India supporting the illegal database on all American citizxens and everything they do financed by the very people whom data he sells everyday to its enemies for pennies. This traitor soon to be maggot will be known as the enemy of the people, hiding or jail for the rest of his life.

 

 

 

Soul Glow's picture

We're all going to be millionaires one day.  Yellen says so.

Tiwin's picture

I say so also. we will all pay 70percent tax on income , and 200 dollars a gallon , and 200 dollar bottles of rotgut wine....but hey , who wants to be a millionaire?

Joe Cool's picture

Billions don't cut it anymore....Is Zerohedge dumbing us down a little?  Kind of feels like it....

Mtnrunnr's picture

Stop thinking and keep sucking

Yen Cross's picture

 I shorted Nasdark last week. That ponzi is running on vapors.

 It looks like a midget trying to reach the box of stale Cheerios[ top shelf] after a binge drinking contest.

American Psycho's picture

That's one hell of a visual Yen.  I have an inverse S&P position for the same reason.

Mtnrunnr's picture

Not trying to be a jerk because I feel similarly, but this insanity isn't close to over yet. The PPT is great at stopping selloffs but someone is also good at keep the top from blowing off. the channel is being protected on both sides. The difference between normal and now is that now it is 100% controlled by computers and individuals protecting their own interests. Your money is better held in gold or investinf in your own private infrastructure like solar or buying pristine land that is worth holding even on a terrible recession. Because when the next one hits it will take our entire monetary system with it. Banks, savings, bonds, pensions. Everything. So spending upur money on a hard asset is the only way to preserve productive value. Shorting won't pan out because if the entity you borrowed from to sell goes insolvent you can't get your money back/the inflation to save it will remder your profits worthless.

r3phl0x's picture

Good luck. IME everything is unshortable in our current fiat fugazi regime. Nominal losses in a major US index exceeding 2-3% - even for a few days - are verboten unless/until they decide to pull the plug bigly, which they will surely do, but only when the last retail holdouts have gone long with max leverage.

any_mouse's picture

Only on paper.

Not bad for a non profit.

Is there calculus for P/E as E -> 0?

Panic Mode's picture

Soon, you can buy bitcoin from prime account.

mily's picture

Everything is Kosher!, erm, sorry, wrong song

Everything is awesome!...

BSHJ's picture

and ABC will not touch it since her husband is head of news there

cherry picker's picture

If it weren't for the gullible who invested untold billions into Amazon to keep it afloat for years when they didn't make any money at all, it wouldn't exist today and I am thinking that it is shareholders coin which keeps it afloat today.

When the pot of gold empties, what will Jeff do?

Only ordered from Amazon twice years ago.  Was disappointed.

Won't buy online again.  Like to see what I am buying, like in brick and mortar, but apparently I am not part of the in crowd.

BigWillyStyle87's picture
BigWillyStyle87 (not verified) Apr 4, 2017 10:55 AM

I have seen a lot of parabolic bubbles collapse in my time, but none will make me happier than when this one does.

affirmed_78's picture

This will be #2 on my list.  TSLA and it's ever-cocky leader will be #1.

fishwharf's picture

At least TSLA does interesting things.  Landing a reusable rocket on a barge is quite a feat.  Amazon is little more than a huge digital bazaar.

https://www.theistanbulinsider.com/wp-content/uploads/2013/08/grand-baza...

affirmed_78's picture

SpaceX ain't owned by TSLA.  Like all of Musk's ventures, he captures people's imaginations and they're dumb enough to pour cash into stock/debt of his money-losing enterprises.  When have any of these businesses recorded a nickel of profit? 

BSHJ's picture

I love buying brick and mortar online from amazon and having THEM pay the shipping!!

gammab0y's picture

And to think I laughed when Time put Bezos on its cover.  If I had shut my fat mouth and bought, I could have retired by now.

Yen Cross's picture

 The retail meltdown is going to hit AMZN soon. Bezos and Musk should start a bunker Co-Op.

HenryKissingerChurchill's picture

the Rothschild family not on the list hu?

but can Bezos PRINT Money? NO, he can just get free money from the governments, like TESLA.

the trillions of the families like the Rothschilds cannot simply be measured because they fücking PRINT money, hence you cannot have any idea of what amounts of money they choose to summon any day

Elliott Eldrich's picture

Richer than the Rockerfeller clan? Richer than the Rothchilds? Richer than the Catholic church? Richer than the Queen of England? Inquiring minds want to know! If I don't see Rockerfellers, Rothchilds, religions, or royalty on this list of "the wealthiest," how I can assume it is close to complete?

Yes We Can. But Lets Not.'s picture

Friend of mine is a big lefty.  Always bitching about Trump.  CNNMSNBC 24/7.  Felt like asking him this morn if he was aware there is a scandal much bigger than Watergate afoot.  But I'm certain he has no clue.  So I left him be.

Spungo's picture

Sounds reasonable. I buy tons of shit on amazon. It's a great marketplace for everything. I have a second hand book in the mail.

J bones's picture

Stocks are pixie dust till the day you sell and collect the currency by having physical paper. Otherwise you dont have it.

Winston of Oceania's picture

Quick everyone start ordering from jet.com or elsewhere, let's kick him in the 2nd quarter!

moorewasthebestbond's picture

Sucks that Amazon stopped selling charging handles and muzzle devices.

0hedgehog's picture

If anyone believes Bill Gates is the richest person in the world, I have a bridge to sell you. He may be the richest person in the world that you ever hear about but it's those who you don't hear about that own and run the world.

milo_hoffman's picture

Not bad for a company that does not even hardly make a profit.

Bryan's picture

And to think, I shorted AMZN back in the day at $63.  It must be animal spirits or something.

mavenson's picture

Richest non-Rothschild in the world or most declared wealth in the world might be more appropriate.

_ArC_'s picture

Uuhhmmm...Richer than the Rothchilds??? Not even close! I believe that when he can print his own money with his own Federal Reserve..

wdg's picture

Here we go again with some FAKE NEWS. The richest men worth tens of trillions of dollars don't even make the list - they prefer to remain unknown so that they can more effectively pull strings that control governments and businesses from behind the curtains. One example is the Rothschild banking family who are worth more than most countries. 

aloha_snakbar's picture

LOL... how can a company that does not make anything be 'worth' 1K a share?

2rigged2fail's picture

Any elite banker or Rothchild friend can print more money in a day and have more fiat at bozos

biker's picture
biker (not verified) Apr 4, 2017 3:36 PM

Millions already know who the real owners are and what they represent. The extinction of their kind so very near, the elitist end reaching close, said threshold of masses their awareness seeing past propagated delusions of conformity and consumption, they truly rebel bloodily against its controllers. Prancing these privileged fake faggots in front of the masses makes elite extinction quicker.

Occams_Razor_Trader's picture

Bezos is a walking dick with ears. CIA shill and overall Prick!