Amazon Misses, Guides Lower, Sees Q4 Operating Loss; Shares Tumble

Tyler Durden's picture

The latest Momo implosion as predicted:

  • AMAZON.COM 3Q EPS 14C, EST. 24C                       
  • AMAZON.COM SEES 4Q SALES $16.45B-$18.65B, EST. $18.16B
  • AMAZON.COM sees 4Q operating income (loss) between $(200) million and $250 million, or between 142% decline and 47% decline compared with fourth quarter 2010

No, Paulson & Co. is not long.

And it just gets uglier:

From the earnings release:

The following forward-looking statements reflect’s expectations as of October 25, 2011. Our results are inherently unpredictable and may be materially affected by many factors, such as fluctuations in foreign exchange rates, changes in global economic conditions and consumer spending, world events, the rate of growth of the Internet and online commerce and the various factors detailed below.

Fourth Quarter 2011 Guidance

  • Net sales are expected to be between $16.45 billion and $18.65 billion, or to grow between 27% and 44% compared with fourth quarter 2010.
  • Operating income (loss) is expected to be between $(200) million and $250 million, or between 142% decline and 47% decline compared with fourth quarter 2010.
  • This guidance includes approximately $200 million for stock-based compensation and amortization of intangible assets, and it assumes, among other things, that no additional business acquisitions or investments are concluded and that there are no further revisions to stock-based compensation estimates.

And as usual: the holders:



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SeverinSlade's picture

CNBS says BTFD.  Stocks are cheap, remember that.

Skeebo's picture

I'm looking for stocks to get cheaper too before I'll start buying.

TruthInSunshine's picture

I'm no prophet, but I do like profit, and I'd dare say I'd add "a lot" to your cheaper, before I'd entertain buying into what may be the Japanese-esque 21 year/negative 88% (and counting) black hole.

Amazon has efficiencies and competitive advantages infinitely more plentiful than Brick & Mortar retailers and other online retailers, and even it misses.

I can hardly wait for the next CNBS anal-cyst to advise how this is the bottom, rather than a mere appetizer.

If Amazon is working off of these margins, Retail-geddon cometh.

Apple is now implementing a 'cut our prices' business model (officially) after seeing unit volume sales miss and 9% decline in same store sales, Amazon misses big, and NFLX loses nearly 1 million customers in a single quarter, and all I have to say is the MOMO crowd is going to relive 2008 with - leverage.

But the sell-siders will all rush onto CNBS & Bloomturd and excoriate the sheeple with cries of BTFD [aka "we really need you to buy at least some of our soon to be big time losers, because The Bernank & Geithner have their hands full with MBS & banking black holes, not to mention the plague of Black Death of looming EuroDebtapocalypse, and we are going to need to be as liquid as possible - please?"]

#Green shoots



#saved-or-created-[fill in blank]-jobs

Fake Jim Quinn's picture

Bad Christmas season coming. Sounds like kids may get gifts, but I think this is season where adults settle for Xs and Os

WonderDawg's picture

Please please please let CMG be next.

max2205's picture

PPT is doing a great job....we should have been down 2,000 Dow points on all these breakdowns.... WELL PLAYED Sir!

azusgm's picture

Please, please, please let BAC be next. And I'm not even short. It is simply time to flush that one.

rumblefish's picture

i've noticed CMG has not been as crowded as of late. don't get me wrong. they are  still slinging some serious burritos but volume has to be down.



Freddie's picture

Santa doesn't come to America since the stupid vermin elected the muslim.

LongSoupLine's picture

No worries, the CNBS and sell side momos still have PCLN to ramp.  If that fails, they can always cut to Phil "Go Unions" Lebeau to distract the lemmings with a pretty new Detriot built and middle class financed glossy red future recall p.o.s.

If that doesn't work then the next step is CNBS "directive #1"...unbutton the blouses and focus on rack.

toady's picture

Speaking of momos, I hope robo got out of netfix & amazon somewhere near the top, otherwise it has been a pretty rough ride lately...

YesWeKahn's picture

You got it wrong. The true strength in Amazon is actually its brand name. All the tech stuff you mentioned is nothing, someone good at it can do that in a few months of time.

DeeDeeTwo's picture

Amazon is now just another middleman, baby.

UP Forester's picture

Nuh-uh.  They're women, and they're on the moon....

riley martini's picture

 Amazon wouldn't even have the .07% margin without the tax free advantage over retailers that have to pay for Amazons free ride .

riley martini's picture

 Amazon wouldn't even have the .07% margin without the tax free advantage over retailers that have to pay for Amazons free ride .

Vampyroteuthis infernalis's picture

#2 of the 5 horsemen of the stock market apocalypse. NFLX, AMZN, BIDU, PCLN and AAPL. The market's end is near.

HedgeAccordingly's picture

another one bites the dust... @theback9 nailed it again

johngaltfla's picture

But, but, but, the CNBS momoconimists said that AMZN, FSLR, and NFLX would guarantee full employment by Q4 2011!?!?!?!

Ronaldo's picture

But, Bob Pissonme said this is just a bit of a rain shower in an otherwise bull market.  Really, this is just the expected pull back after a great run up in the market, the economy is in good shape. 

Can't you feel that wet spot running down your back, it is just rain!

azzhatter's picture

Bezos giving Pissonme a golden shower

azzhatter's picture

Cramer- buy buy buy buy...................  Oh wait that was Netflix


Gotta love that operating margin at Amazon

YesWeKahn's picture

Next year will be event better when CA buyers have to pay sale taxes.

gulf breeze's picture

I am Robofader and I went short @ the highs. I am the best



homersimpson's picture

The only thing Robo is short is his ability to pick winners before the fact.

LooseLee's picture

BTW Where is that POS MomoTard? Yesterday it was Netflix and today Amazon; two of his favorite bulltard calls. What a lousy POS conformist establishment pig is he! ZH readers kept pointing out the fundamentals of these companies and he scoffed. Well, Robo, what do you have to say now? Be a man! Let's hear your rationalization...

monopoly's picture

10 Billion, 20 Billion, it means nothing if you earn .14 cents. Freaking absurd.

UP Forester's picture

It's easy if you give a $450 million spread on the next quarter....

YesWeKahn's picture

Don't worry, they will pump this junk back up tomorrow. This is the darling stock for many idiots.

catacl1sm's picture

and BOOM goes the dynamite!

Smithovsky's picture

looking forward to (buying puts on) GRPN

Sequitur's picture

Yep. Got some big puts on LNKD and CRM, two supreme shitbags with p/e at 400+.

devo's picture

I'd add VMware to your list. Not a complete shitbag, but you definitely do not want that P/E ratio in this environment...

Pool Shark's picture



LNKD currently at P/E of 1,238...

FinHits's picture

You know that it would be untrue 

You know that I would be a liar 

If I was to say to you 

Girl, we couldn't get much higher 


Come on baby light my Fire*


*Kindle variant


I'll stick my neck out and say that Kindle Fire will grab significant iPad market share, and the ramp up of volumes will be okay. Rebound in the cards.

TruthInSunshine's picture

catacl1sm, I'd be remiss to not give credit where credit is due (context nothwithstanding):

Boom Goes the Dynamite
SeverinSlade's picture

Amazon's going to follow NFLX.  They'll likely soon respond with raising pricing for Amazon Prime which will lead to even more losses.

DormRoom's picture

With a P/E of 100, they have a lot of room to fall.

Blorf's picture

Exactly, they are still at NFLX from three months ago levels in terms of PE.  No reason to buy here.

DormRoom's picture

I'm still waiting for the web2.0 bubble to pop.. Linkedin has a P/E over 1000!  Christ.  Then all those angel/VC seeded companies with poor business models, will go bust.  DST (Digital Sky Technologies) will implode, and Silicon Valley will be ruined, from their bubble-mania (look @ the lofty  valuations in secondary markets).  That is the lesson for misallocating capital in such a grand scale.  There is no free lunch.  Bankers have failed to learn this lesson.



Willzyx's picture

PCLN I'm looking at you

DormRoom's picture

floats of PCLN, and LNKD are too small.  I wouldn't short them, less a short squeeze wipes you out. But the drop in AMZ, and NFLX will put over-valued web companies on notice.

Willzyx's picture

Shorting the likes of PCLN or LNKD is always a tricky proposition.  Just ask Whitney.  Worthless OTM puts are better than a margin call.  With a P/E of 35, market cap of nearly $25 billion, and a book value of $2 billion, the flameout will be spectacular.  Just like NFLX.  Unless of course they continue to grow their revenue at a rate of 25-35% each year.

Reform1776's picture

Check out Jan 2012 OTM PUTS. They go clear down to $90.

SofaPapa's picture

They didn't "fail" to learn it.  They were protected from learning it by the insertion of hundreds of billions of dollars to cover the losses that such behavior brings.  So they've learned the lesson they were taught: we do not need to fear losses as long as those losses are large enough; when large enough, the taxpayer will take the loss.  Moral hazard, not incompetence.

Biggvs's picture

Wow, AMZN tanks, ES doesn't even care.

Ralph Spoilsport's picture

What is ES? Thanx in advance.

TheLooza's picture

Electric Seal.


He don't give a fuck about much, granted.