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Visual Summary Of AMZN: 263x PE Multiple, 1.2% Operating Margin, $7 Million Net Income And 69,100 Employees

Tyler Durden's picture


Amazon's AH stock price may be up or down, or sideways, but here are the three charts that make us scratch our heads as we valiantly try to explain how a company which just said it will have 'Operating income (loss) inbetween $(350) million and $(50) million" and currently has a 263x P/E, is worth anywhere close to where it is trading.

First, here is AMZN's total employees and worldwide sales growth. The blue line is self-explanatory. The red one shows that the firm has grown its employees by 150% in the past two years.

Next, here is AMZN's Trailing Twelve Month Operating Margin, which has collapsed from just under 5% to just 1.2% in the past two years, and its TTM Net Income, which at last check was $377 million, which fits about 263 times inside its market cap of $100 billion.

Finally, here is what AMZN's quarterly operating profit and net income were. At June 30, the company with 69,100 employees and over $54 billion in LTM net sales, posted... $7,000,000 in Net Income.


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Thu, 07/26/2012 - 16:42 | 2654532 slaughterer
slaughterer's picture

The Tao of Amazon can be summed up in one sentence:

Profit is for pussies.  

Thu, 07/26/2012 - 16:42 | 2654536 Concentrated po...
Concentrated power has always been the enemy of liberty.'s picture

Earnings are for sissies.

Thu, 07/26/2012 - 16:47 | 2654573 Central Bankster
Central Bankster's picture

But here is the rub, in a completely manipulated market, which is constantly being fed new money to purchase securities, who cares if a company even makes money.  The whole market is a casino and it is entirely the fault of the Fed for not allowing assets to be priced based on cashflow and earnings, because that requires the market ponzi to collapse.

Thu, 07/26/2012 - 22:48 | 2655448 Buck Johnson
Buck Johnson's picture

Yep, and they can't allow that or the whole Western banking system would collapse and so would the US economy.  They are doing everything they can to keep this system going.  Some say that they are trying to start a WWIII.  I would say yes but that is insane.  To cover up the economy going under by starting a massive war that we may or may not win is crazy. 

Fri, 07/27/2012 - 04:52 | 2655683 fatcat
fatcat's picture

it's not that crazy. there is no "we" in the banker circles. they are hedged, and play both sides of any war. regardless of who wins, they benefit.

war has been used to "kick start" economies (aka create more debt) in the past. why not again?

Thu, 07/26/2012 - 16:48 | 2654579 AldousHuxley
AldousHuxley's picture

valuation is for the masses



Thu, 07/26/2012 - 17:22 | 2654702 Rainman
Rainman's picture

hahaha.....what bad can possibly happen to a public pension fund overweight on a 263 PE ??? 

Thu, 07/26/2012 - 17:22 | 2654703 Stoploss
Stoploss's picture

Ahh, i get it, all the fired ex govt employees go to work for amazon whorehouse, er, wharehouorse, er.

Let me guess, amazon's benny's are real close to gov't benny's.

Thu, 07/26/2012 - 18:49 | 2654946 mjk0259
mjk0259's picture

Not even close, they don't even provide A/C in the warehouses and people work like dogs with no beeny's.

Thu, 07/26/2012 - 21:57 | 2655373 zyby
zyby's picture

Those employees are soon to be replaced by robots...

Thu, 07/26/2012 - 17:59 | 2654807 Never One Roach
Never One Roach's picture

Only 'the little people' worry about revenues.

Thu, 07/26/2012 - 20:56 | 2655246 max2205
max2205's picture

Amazon taco. Empty.

Govt secretly keeping them alive so they can delivery the mail when the USPS get shut the fuck down.

Thu, 07/26/2012 - 17:01 | 2654591 Daily Bail
Daily Bail's picture

For what it's worth, back in 2000, as the internet meltdown was upon us and Maria Bartiromo was in treatment for Bubble Psychosis, I built a short position of 84,000 shares in Amazon for a fund I was managing.  It turned out to be a decent 6-month trade (made 15%). The value then was about 1/5 of the current market cap.  Glad I got the F out.

Meanwhile, this bit of news could be a gamechanger in the Corzine case.

Look for a Special Prosecutor to be appointed in the next few weeks. Obama buddy Jon Corzine's luck might finally be starting to run out.

CORZINE CRONYISM BOMBSHELL - High Ranking DOJ Lawyers And AG Eric Holder Were Partners In Firm That Represented MF Global
Thu, 07/26/2012 - 17:05 | 2654649 The Monkey
The Monkey's picture

These crooks get shuffled around because they know too much.

Thu, 07/26/2012 - 18:18 | 2654841 NotApplicable
NotApplicable's picture

Bombshell? Special Prosecutor?

*checks HuffPo main page*

Lead Story? (all about Romney looking dumb in the UK)

*clicks on politics tab*

Lead Story? (all about Romney looking dumb in the UK, but with a different pic and headline)

Until it shows up on these pages, it ain't shit as far as "scandals" go.

Perhaps you were meaning to refer to Kristen Stewart?

Thu, 07/26/2012 - 16:53 | 2654600 azzhatter
azzhatter's picture

The Obama business model - no profit

Thu, 07/26/2012 - 17:15 | 2654683 Ese Pinche
Ese Pinche's picture

Employees are for the ignorant

Thu, 07/26/2012 - 19:14 | 2655010 William Murderface
William Murderface's picture

Multiple expansion!  Bitchez!

Thu, 07/26/2012 - 20:30 | 2655182 Need More Cowbell
Need More Cowbell's picture

But I use Facebood and Netflix and Amazon so shouldn't I but the stock???  Gag.

Thu, 07/26/2012 - 20:31 | 2655188 eclectic syncretist
eclectic syncretist's picture

How true.  The problem is amazon has been a high-flyer for so many years there's no telling when the collapse in P/E will come

Fri, 07/27/2012 - 11:02 | 2656569 SoCalBusted
SoCalBusted's picture

I was nervous when it was at $90 and cashed out!

Fri, 07/27/2012 - 04:24 | 2655675 Azannoth
Azannoth's picture

That's what you get when the CEO of your Company is an Idealist

And some people bitch about firms putting profits before people, sure just do it the other way around and see how quickly you hit the pavement

Thu, 07/26/2012 - 16:59 | 2654535 ZerOhead
ZerOhead's picture

It's heading south fast...

With 69,000 employees and tanking income numbers it's time for Amazon to get hooked up to the Fed's discount window before it's in Mexico or Brazil or something...

Thu, 07/26/2012 - 16:42 | 2654537 flacon
flacon's picture


Thu, 07/26/2012 - 16:43 | 2654544 Chuck Bone
Chuck Bone's picture

Hopium: $220 new, $24 used

Thu, 07/26/2012 - 16:44 | 2654547 unwashedmass
unwashedmass's picture

and it is climbing after hours......i have gold and silver miners selling for pennies that make more than Amzn......

Thu, 07/26/2012 - 16:57 | 2654626 Not Too Important
Not Too Important's picture

The PPT at work. Long ink.

Thu, 07/26/2012 - 17:27 | 2654720 JustObserving
JustObserving's picture

Only thing that can save the miners is China starts buying them.  The pressure on gold and silver to stay down is immense.  Asians are buying gold and silver but not fast enough to match paper silver and gold being sold.

Why are the Europeans not buying gold and silver in quantity now there is a threat of printing by Draghi?

Thu, 07/26/2012 - 18:20 | 2654848 NotApplicable
NotApplicable's picture

Interesting thought that the only thing preventing tin-pot dictators from nationalizing everything might be cutting a deal with the Chinese instead.

Not that either will benefit mankind...

Thu, 07/26/2012 - 16:44 | 2654550 cougar_w
cougar_w's picture

Hey don't knock it. Any of us would be well with 7 large.

Thu, 07/26/2012 - 16:44 | 2654552 Dr. No
Dr. No's picture


"That's the thing about greed, Arch. It's blind.And it doesn't know when to stop."


Thu, 07/26/2012 - 16:45 | 2654556 kaa1016
kaa1016's picture

...all that and the stock is still $217. WTF...

Thu, 07/26/2012 - 16:45 | 2654557 same old story
same old story's picture

What 's the big a deal.   So they have no profits, that is so old school.  

Thu, 07/26/2012 - 17:02 | 2654642 Not Too Important
Not Too Important's picture

I was just watching Cavuto on Fox. They showed a daily DJ chart, down just before the close, with a green number, plus sign and green arrow up.

The chart clearly showed the opening was higher than the number they gave. Do they think no one looks at the chart to see if it matches their numbers?

Then Cavuto was saying they lost the feed to Draghi. Twice. The snippet that did get through was Draghi blaming the whole mess on the Americans.

From this I deduce two things: that the Europeans are getting ready to fight the Americans for reparations for their collapse, and Fox thinks their viewers are stupid.

From this I declare two things: Europe won't get a dime of my money, and I won't watch Fox anymore. One small step for man, . . .

Thu, 07/26/2012 - 16:46 | 2654565 azzhatter
azzhatter's picture

very expensive distribution model- it's really tough to sell low cost stuff via internet. Shipping costs as much as product in many cases

Thu, 07/26/2012 - 16:49 | 2654581 devo
devo's picture

And they're charging tax on some items. It's a disaster. I noticed everything I've ordered off the site in the past month has taken forever to ship. Like two weeks. They must be trying out some new method...maybe partnerships with third party wholesalers or something. It's not working--I canceled my order rather than wait 2 weeks for a shipment.

Thu, 07/26/2012 - 16:53 | 2654601 Abiotic Oil
Abiotic Oil's picture

Yep.  I've noticed a siginificant slowdown as well.  It is especially prevelant among their non-Amazon vendors, affiliates or whatever.  I keep ordering something that shows "in stock" from the vendor for a very low price, then the item doesn't ship, then order is cancelled.

I think the vendors are trying to rely on JIT inventory and don't actually order the "in stock" item until the customer orders it.  Then the distributor is out of stock and nothing ships.

Then I get pissed and stop being a customer.

Thu, 07/26/2012 - 16:55 | 2654615 devo
devo's picture

I think the vendors are trying to rely on JIT inventory and don't actually order the "in stock" item until the customer orders it.  Then the distributor is out of stock and nothing ships.

Exactly, it feels like order fulfillment by demand now.

Thu, 07/26/2012 - 18:34 | 2654894 pursueliberty
pursueliberty's picture

Dealing with this right now on a cell booster I ordered for the inlaws.

Amazon show three packages shipping.  One arrived three days after ordering, which was a simple 25' cable, the other two still have no arrival date, credit card charged.

Has drop shipped written all over it, though it didn't appear to be a outside vendor I was purchasing from.  Cable came in amazon box.  This is my first issue, but I hope it isn't the start of a problem.  Ebay and other means will be cheaper after they start charging tax in many cases.

Next step is to set up a shipping hub in northern Mexico to find lower wages.

Thu, 07/26/2012 - 18:41 | 2654923 NotApplicable
NotApplicable's picture

Northern Mexico you say?

Hmm.... there might just be some product in that area that can improve their margins.

Thu, 07/26/2012 - 21:30 | 2655320 grid-b-gone
grid-b-gone's picture

I like Amazon as a customer but recently found a couple items in local brick & mortar stores at lower prices, even after sales tax, time, and gas.

AMZN is convenient, but not always the best value.

Thu, 07/26/2012 - 18:08 | 2654815 Never One Roach
Never One Roach's picture

The proposed taxing internet sales at the state level, and increased postal costs will further crush American businesses and shove the economy furhter into a recession from what I read. In fact, I think the coming sales tax will be the final, severe knockout blow to several stores that are barely alive now, live Sears and JCP and Macy's. Their physical stores are empty. When their internet sales plunge, kiss them goodbye with the hundreds of thousands they employ.

The law of unintended consequences will bite these states who patied for years and are now desperate.

Thu, 07/26/2012 - 16:47 | 2654570 kito
kito's picture

rumor has it that bernanke, in an exclusive deal with amazon,  will be distributing digital dollars to all citizens via the kindle......

Thu, 07/26/2012 - 18:33 | 2654890 Bobbyrib
Bobbyrib's picture

If Amazon weren't losing money on Kindles, that would be an excellent deal for them.

Thu, 07/26/2012 - 16:47 | 2654571 devo
devo's picture

$25-35 stock.

Takes a lot to shoot down high flyers. I don't know how you hold the bag and think it's going to grow into that multiple rather than cut bait now.


Thu, 07/26/2012 - 16:48 | 2654576 azzhatter
azzhatter's picture

My kid dabbles in selling stuff via ebay. He was telling me last night he sold something for $375.00 and it cost him $250.00 to ship it. Heavy metal piece. Imagine selling $10.00 stuff and paying $12.00 to ship it

Thu, 07/26/2012 - 16:50 | 2654583 AldousHuxley
AldousHuxley's picture


no fee, no shipping cost, all cash transaction

Thu, 07/26/2012 - 16:52 | 2654593 azzhatter
azzhatter's picture

good for local stuff, I agree. But he is selling specialty stuff and demand is nationwide. Shipping costs will eat you alive

Thu, 07/26/2012 - 21:06 | 2655277 jerry_theking_lawler
jerry_theking_lawler's picture

this 'inventory management' binge has gone too far.....example: a piece of my plant equipment went down wednesday (broke a belt which costs $15.00). Had to get it overnighted to have the equipment up and running to make production....cost $40.00.

but with accountants, inventory analyists, maintenance and purchasing specialists....i spent $55 dollars for an item that would cost $15 plus lost production because some genius didn't want to purchase it and keep it on hand (on the books as inventory/capital)....

makes no logical sense.

Thu, 07/26/2012 - 18:46 | 2654938 NotApplicable
NotApplicable's picture

Unfortunately, it has an extremely high scammer to legitimate respondent rate. My wife and daughter have been using it to clear out a lot of stuff we no longer need, and they deal at least five frauds for every real person.

Then, even many of the real people seem incapable of completing a transaction, or even responding in a timely fashion. Instead, they'll get an email a month or so later.

Local Quickswap group works well though, as there plenty of regulars who work as market-makers in the spirit of Fred G. Sanford.

Fri, 07/27/2012 - 11:04 | 2656578 SoCalBusted
SoCalBusted's picture

Plus you get to meet new and "interesting" people!

Thu, 07/26/2012 - 16:51 | 2654587 Getting Old Sucks
Getting Old Sucks's picture

Crap!  I shop them a lot and get good deals even with them charging sale tax.  There goes that pretty soon.

Thu, 07/26/2012 - 16:52 | 2654589 ghostfaceinvestah
ghostfaceinvestah's picture

No problem, in September they start charging sales tax on customers in California.  I am sure that will help the top line.

Thu, 07/26/2012 - 17:02 | 2654620 Dr. No
Dr. No's picture

Texas too.


EDIT: I do not support it.  Amazon will suffer (and consumers) due to state's greed.

Thu, 07/26/2012 - 18:25 | 2654857 NotApplicable
NotApplicable's picture

And it won't help the states either, as more and more commerce will shift to used items traded locally amongst non-business entities.

Welcome to Garage Sale Nation. (please bring your own bag)

Thu, 07/26/2012 - 18:39 | 2654913 pursueliberty
pursueliberty's picture

Ebay is still a means.  I purchased a set of load leveling air bags from ebay.  Lowest I found online, one vendor was 299, but in my state, thus charging tax, the other in texas was $1 more.  I purchased from texas.  When they come down on the Ebay it should kill the site.

Thu, 07/26/2012 - 18:49 | 2654947 NotApplicable
NotApplicable's picture

I still use eBay quite a bit for small specialty items that might exist in my city, if I only knew where to look.

Thu, 07/26/2012 - 20:09 | 2655135 Bastiat
Bastiat's picture

Yeah? Fuck that, then. That's a big market to lose.  If I'm going to pay CA tax, I'll buy from a CA company.

Thu, 07/26/2012 - 16:52 | 2654590 css1971
css1971's picture

Amazon are the anti-apple.


Thu, 07/26/2012 - 16:52 | 2654594 monopoly
monopoly's picture

Correct me if I am wrong guys, I am not the sharpest tool in the shed, but I think what Tyler is trying to tell us is that at a current price of $217.00 we want to move the decimal point to the left one space. Does that sound about right?


Thu, 07/26/2012 - 16:54 | 2654606 alien-IQ
alien-IQ's picture

two spaces to the left is more like it.

Thu, 07/26/2012 - 16:53 | 2654598 alien-IQ
alien-IQ's picture

263X PE ratio is when Robotrader starts buying.

Thu, 07/26/2012 - 17:00 | 2654640 Jethro
Jethro's picture

I want to see MDB's take on this.  I still laugh at his FB IPO "Buy it at any price" order.  Come on MDB....give us some levity....


Thu, 07/26/2012 - 17:16 | 2654684 azzhatter
azzhatter's picture

SHHHH!! He's trying to dump now

Thu, 07/26/2012 - 17:19 | 2654694 Agent P
Agent P's picture

It's only 180x on the forward P/E.

/trying to post with a straight face

Thu, 07/26/2012 - 16:53 | 2654599 Cursive
Cursive's picture

Yeah, yeah, yeah, but their dividend is the tits.  /sarc

Thu, 07/26/2012 - 16:54 | 2654607 buzzsaw99
buzzsaw99's picture

$100B market cap, LMAO. FB is cheap compared to AMZN.

Fri, 07/27/2012 - 01:34 | 2655601 unununium
unununium's picture

They're both bargains compared to AZO, with its negative and declining book value.  Stock price ever higher.

Thu, 07/26/2012 - 16:56 | 2654621 Peter Pan
Peter Pan's picture

Amazon is typical of much of what has gone wrong with America. Amazon in effect is excess capacity in a system that is destroying both other sellers' margins as well as its own in pursuit of running the world"s only book store from a warehouse you cannot even visit to browse through a book or two.

At 263 x p/e it is typical of what type of fantasy props up the stock market. It would be fascinating to see what the Dow woud be if valuations were adjusted to reflect 20 x earnings for all these overrated stocks.

Thu, 07/26/2012 - 18:37 | 2654906 Bobbyrib
Bobbyrib's picture

Yeah, I know it's kind of fucked up, but I'm glad place like Best Buy and Barnes & Noble may not be going out of business, because Amazon barely makes money on their transactions. Plus I like competition, it keeps businesses honest.

Thu, 07/26/2012 - 18:55 | 2654966 NotApplicable
NotApplicable's picture

You know, I'd tend to blame the excess capacity on the fraudulent monetary system rather than the entity that is trying to profit from the imbalance.

Besides, brick and mortar booksellers are today's buggy-whip makers. Their model has no place in a digital world. Paying the mark-up required to maintain a selection of well lit, air-conditioned, browsable isles is a recipie for failure.

Thu, 07/26/2012 - 19:50 | 2655090 Bobbyrib
Bobbyrib's picture

There are people who will still use brick and mortar bookstores though. They have a place in our society for people woh don't want to put their credit card into an application on the internet or like to thumb through the book before they buy it. Being that Amazon is the biggest competitor to brick and mortar stores, they may not be ltoday's buggy-whip makers.

Thu, 07/26/2012 - 16:56 | 2654625 NeedleDickTheBu...
NeedleDickTheBugFucker's picture

I guess they will just make it up on volume.

Thu, 07/26/2012 - 17:17 | 2654686 Winston Churchill
Winston Churchill's picture

Never mind the quality,feel the width.

Looks like they have to lay off one hell of a lot of employee's quick.

Will Obummer do a GM ?

Thu, 07/26/2012 - 17:00 | 2654630 css1971
css1971's picture

They clearly have some super computer which optimises the business to the point where they can run it on any margin they dial in. They obviously have it set to Gillette mode.

Thu, 07/26/2012 - 17:00 | 2654631 linrom
linrom's picture

Google, AMZN, WMT and ebay will take over global retail sales. With same and next day delivery, shopping malls are going to become history.

Almost all my purchases come either from AMZ, ebay and WMT. With the next generation, that trend will continue to its fruition--online killed the shopping mall star.

Thu, 07/26/2012 - 17:42 | 2654767 adr
adr's picture

Amazon makes it impossible to make money and in some cases sells more stolen and counterfeit goods than true name brand products.

Half the TVs they sell fell off the back of trucks. I bought a high end DSLR camera from Amazon once and it arrived with a Russian manual and started up in Russian.

My company never has and never will sell to Amazon, yet our products are all over the site. Every single one of them a counterfeit from China. Repeated calls to Amazon have got us nowhere. We threatened to sue Amazon, they claim they are not responsible and we must sue the merchant directly. Of course the merchant is not registered to do business in America, and therefore not able to be sued.

Thousands of corporations need to band together for the largest class action suit in history and take Amazon down to the tune of $1 trillion in damages.

Thu, 07/26/2012 - 18:39 | 2654917 Bobbyrib
Bobbyrib's picture

Consumers also need to band together and stop buying cheap Chinese shit.

Thu, 07/26/2012 - 19:15 | 2655014 NotApplicable
NotApplicable's picture

As opposed to over-priced union shit? Or is this one of those forced austerity things?

Other than gov. sanctioned slave labor (and other ways corps use gov power to avoid their full costs of doing business), there is nothing bad about buying from the lowest cost provider. In fact, it's GOOD, as you're doing your part in supporting sustainable economies, as efficiency benefits us all in a world of scarcity.

Once again, I'll note that the driver of illegitimate cheap shit is the govs' most wicked creation, the central bank. Eliminate this method of theft, and prices will soon revert to a value reflecting their true demand and production will react in accordance to this demand with respect to cost of production. (meaning that growth doesn't occur for growth's sake, but rather, only where the opportunity for profit exists by meeting a currently unmet human need)

Thu, 07/26/2012 - 19:55 | 2655101 Bobbyrib
Bobbyrib's picture

It's supporting your country as opposed to supposedly supporting the idea of capitalism by buying shit from a bunch of commies. I think people should buy from the lowest cost American producer, but if you want to know what the faults are for buying from internation producers of the cheapest product, all you have to do is look at the gutted country you may live in known as the United States of America.

China is pegging the yuan below the dollar. When pegging below someone else's currency occurs, why does it matter what the value is?

Thu, 07/26/2012 - 18:58 | 2654975 NotApplicable
NotApplicable's picture

You know, regardless of what Amazon tells you, you CAN sue them directly.

Better yet (if you haven't done so already), post reviews on the product pages labeling them as fake and mention that Amazon won't do anything to stop them. If they delete your review, then sue them again.

Thu, 07/26/2012 - 16:59 | 2654634 Hype Alert
Hype Alert's picture

Sales tax will kill them and a lot of other online commerce. 

Thu, 07/26/2012 - 17:03 | 2654643 Dr. No
Dr. No's picture

Bad for consumers.  I agree with your assessment and I fear the honeymoon is over.

Thu, 07/26/2012 - 17:16 | 2654687 crawldaddy
crawldaddy's picture

not exactly. If they dont have to avoid sale tax that will allow them to set up distribution centers in every state.  Next day delivery will become the norm.

Thu, 07/26/2012 - 16:59 | 2654635 Zola
Zola's picture

I do have to give it to amazon that it is a good business where customers actually go on there to purchase stuff and are willing to pay. Not like facebook... However the valuation is ridiculous. Everything has a fair value and this looks like a nice short. But it did last year, and the year before too...

Thu, 07/26/2012 - 17:44 | 2654774 adr
adr's picture

better check that product label, you might open it up and find out it isn't really what you think you bought.

Why does the chip on my Amazon product say Untel?

Thu, 07/26/2012 - 17:00 | 2654637 Squid Vicious
Squid Vicious's picture

By the time they grow into this valuation Bezos will be doing the conference call from the moon.

Thu, 07/26/2012 - 17:00 | 2654639 Father Lucifer
Father Lucifer's picture

Next time you shop online use Firefox with the Helping Hand add-on and you will find Amazon has the lowest price 90% of the time and when you use free shipping almost 100% of the time. I will miss Amazon when they go broke and close shop. I don't see how they make any profit at all.

Thu, 07/26/2012 - 17:09 | 2654663 alien-IQ
alien-IQ's picture

Maybe some political flunky will declare them "Too Cheap To Fail" and hand them a few billion taxpayer dollars to keep providing the amerikan consumer with pretty trinkets at discount prices because that is vital to the US eCONomy?

Thu, 07/26/2012 - 17:19 | 2654692 azzhatter
azzhatter's picture

it's free shipping because they eat it out of their margin. If they need to juice profits the cost is gonna go sky high. Shipping a single book 200-300 miles from a dist center costs 50% of the selling price

Thu, 07/26/2012 - 17:32 | 2654744 unwashedmass
unwashedmass's picture

they don't have to actually make a profit...remember FASB regulations have been changed so that you can declare whatever values you want for some of your key component assets. So they can just value their inventory at whatever they want....and always appear solvent no matter what. 

Thu, 07/26/2012 - 19:00 | 2654980 NotApplicable
NotApplicable's picture

Profit? Looks like their mandate is "maximum employment" and "price stability."

God's work, I tell ya.

Thu, 07/26/2012 - 17:04 | 2654644 dwdollar
dwdollar's picture

Just the beginning...

In the future, it will be more practical to ship Chinese crap directly from China, instead of using bloated corporate middle-men who jack the price up 50% for having a pretty website.

Thu, 07/26/2012 - 17:26 | 2654718 Haager
Haager's picture

Agreed, and it will be delivered by a warship.

Fri, 07/27/2012 - 11:13 | 2656613 SoCalBusted
SoCalBusted's picture

It's happening now on eBay.

Thu, 07/26/2012 - 17:06 | 2654653 Dr. No
Dr. No's picture

Slash and burn in the Amazon....

Thu, 07/26/2012 - 17:11 | 2654668 Mitch Comestein
Mitch Comestein's picture

This company needs to be added to the DOW.  Kick CSCO out.  Profits are so yesterday.

Thu, 07/26/2012 - 17:12 | 2654673 Mitch Comestein
Mitch Comestein's picture

To add to my comment.  I cannot believe my fucking eyes.  Someone would pay that much for a company with a 1.2% Op margin.  Stocks are cheap my balls.  Not this one at least.

Thu, 07/26/2012 - 17:13 | 2654676 alien-IQ
alien-IQ's picture

AMZN now at $225. fuck me.

Thu, 07/26/2012 - 17:26 | 2654712 alien-IQ
alien-IQ's picture


this is fucking insane. What's the PE now? 270x? 280x? 1000x? does it even matter any more?

Thu, 07/26/2012 - 17:25 | 2654713 Squid Vicious
Squid Vicious's picture

took a flyer on the 180 puts... lol... must be some real good BS being dished out on the call

Thu, 07/26/2012 - 17:28 | 2654727 alien-IQ
alien-IQ's picture

yesterday, near the end of the day, I came very close to picking up some SPY 131 puts. Then I backed off and didn't do anything. So very glad I didn't pull the trigger.

Thu, 07/26/2012 - 17:14 | 2654679 YesWeKahn
YesWeKahn's picture

The real issue is that who are those idiots keeping this junk in their portfolio.

Thu, 07/26/2012 - 18:28 | 2654865 NotApplicable
NotApplicable's picture

Just everyone who manages a retirement/insurance fund.

What could possibly go wrong?

Thu, 07/26/2012 - 20:34 | 2655192 lotsoffun
lotsoffun's picture

you've got something better to invest in?  not that i disagree, but if i'm a testorone loaded 35 year old asset manager, what am i going to buy?  muni bonds?  ust's?  oh.  i forgot.  spain 30 years are CHEAP and yield.


Thu, 07/26/2012 - 17:18 | 2654690 sudzee
sudzee's picture

No problem, they have 69,000 employees they can fire.

Thu, 07/26/2012 - 17:20 | 2654698 Meesohaawnee
Meesohaawnee's picture

i cant believe how bubblevison is spinning facefuck....or can i

Thu, 07/26/2012 - 17:21 | 2654700 gatorengineer
gatorengineer's picture

AMZN is needed as they will be one of the main payers of the internet sales tax, they are needed for the greater good.......  Of Course adding 6-10% to each item wont hurt sales...........  Look into Bennies eyes, you are getting sleepy very sleepy, and even mo stupid..........

Thu, 07/26/2012 - 17:23 | 2654708 JLee2027
JLee2027's picture

It's the New Economy stupid. Everything trades on vapor, rumors, and cause the ChairSatan said so.

Thu, 07/26/2012 - 17:28 | 2654726 slaughterer
slaughterer's picture

AMZN going up 2.5% in AH. 

Thu, 07/26/2012 - 17:31 | 2654736 disabledvet
disabledvet's picture

And that's how you become....a BILLIONAIRE.

Thu, 07/26/2012 - 17:37 | 2654759 Hetty Green
Hetty Green's picture

Profits?  We don't need no stinkin' profits!

Thu, 07/26/2012 - 17:46 | 2654772 tekhneek
tekhneek's picture

Let's do this, let's make $900,000.00 and have $899,999.00 in expenses.

Takes money to make money I suppose...

Thu, 07/26/2012 - 17:46 | 2654776 oldtech
oldtech's picture

Don't rag on them!  They have 69,000+ employee's.... it's a social(ist) company.....

we need jobs not profits... 

Thu, 07/26/2012 - 17:58 | 2654803 adr
adr's picture

I will never shop on Amazon knowing they allow marketplace members to sell counterfeit and stolen product. When pressed Amazon refuses to shut down the marketplace merhants that sell counterfeit and or stolen products.

My company proved to Amazon executives that over 100 Amazon Marketplace "stores" sell counterfeit product and they did nothing. Claiming it was not their responsibility to police individual merchants. Knowingly allowing counterfeit goods to be sold though their site should be enough for the government to shut Amazon down permanently.

That action alone is enough to convict Bezos for any number of IP violations, international commerce laws, customs violations, and hundreds of other criminal charges. If you or I opened a store in a mall and allowed what goes on at Amazon, we would be thrown in jail and have all our assets confiscated.

Thu, 07/26/2012 - 18:32 | 2654882 NotApplicable
NotApplicable's picture

Do you have evidence of stolen goods on Amazon?

Thu, 07/26/2012 - 18:44 | 2654932 Bobbyrib
Bobbyrib's picture

Free market capitalism /sarcasm.

Thu, 07/26/2012 - 18:02 | 2654814 techstrategy
techstrategy's picture

Cash balance: Down

Cash flow: Down

ROIC: Dropping

Inventory turns: Dropping (this will drop further with geographic expansion)



What is your sales productivity/intensity in regions where you collect sales tax versus those where you don't, expressed in AMZN sales per $ GDP, per $ national wages, per person, etc

They let the CFO simply say "we collect taxes in almost half the regions and do well".  F'in nitwits.  A bunch of junior analysts without the capacity to think on their feet...

This will be a truly epic, Webvanesque fail...

Thu, 07/26/2012 - 18:13 | 2654835 Mr_Wonderful
Mr_Wonderful's picture

Yeah, you got to scratch your head. They make 300 million dollars from operations in the first half of 2012 and this gives them a market cap of 100 billion dollars? That´s lahlah land.

Thu, 07/26/2012 - 20:30 | 2655186 lotsoffun
lotsoffun's picture

there was a time when they were growing.  that may be over.  it happens.  20 years ago, ask anybody if gm or woolworths was going under.   or merril lynch.  for the analysts predicting aapl at 1,000 - well, bring back steve jobs again.  that would really be impressive, and worth buying into.  really new technology. :)


Thu, 07/26/2012 - 18:27 | 2654861 ATG
ATG's picture

AMZN a company of the future

and may always be...

Thu, 07/26/2012 - 18:35 | 2654897 NotApplicable
NotApplicable's picture

Once Amazon and WalMart are officially branches of the Federal Dept. of Subsistence and Child Welfare, all competition to them will be outlawed.

You know, like they did with the Fed, except with food and trinkets rather than digits.

Thu, 07/26/2012 - 18:30 | 2654877 blunderdog
blunderdog's picture

Stock price is a PRICE, not a VALUE.

Thu, 07/26/2012 - 18:37 | 2654908 NotApplicable
NotApplicable's picture

Are you making this point in reference to anything in particular?

Thu, 07/26/2012 - 19:07 | 2654994 blunderdog
blunderdog's picture

My post is a simple reminder for all those folks jabbering about "valuations."

Thu, 07/26/2012 - 19:21 | 2655025 NotApplicable
NotApplicable's picture

You'd be far better served by responding to those folks, rather than the article itself which never uses the term. Otherwise you look like the "old man shouting at a cloud." ;)

Thu, 07/26/2012 - 23:33 | 2655503 blunderdog
blunderdog's picture

I embrace my own idiosyncrasies, but I appreciate the critique.

Thu, 07/26/2012 - 18:38 | 2654909 Mr_Wonderful
Mr_Wonderful's picture

So, they have 450 million outstanding shares. It´s possible that they´ll make $2 per share in the next years. If you want to be really generous you´d maybe recommend this stock at $50-60.

Thu, 07/26/2012 - 18:47 | 2654941 L927
L927's picture

ok, well well well, that's because it is no so cool as FB. Better long FB.


Thu, 07/26/2012 - 18:48 | 2654944 genr8n
genr8n's picture

Looks like a better bet than Faceplant!

Thu, 07/26/2012 - 18:55 | 2654967 JenkinsLane
JenkinsLane's picture

It's time to coin a new term for these - "Hail Mary P/E's".

Thu, 07/26/2012 - 19:06 | 2654992 robertocarlos
robertocarlos's picture

Don't ask me how the economy works.

Thu, 07/26/2012 - 19:09 | 2654998 TrainWreck1
TrainWreck1's picture

My guess is they are trying the WalMart model: start out cheap, drive your competitors out of business, then jack up prices. Only problem is WalMart model is for Brick & Morter. Anyone can set up an Amazon style storefront (, etc)

Their shipping is their Achilles heel. Dist centers sound like sweatshops, where people are tossing goods in boxes with no padding. Returns must be astronomical. To be fair, other stores (NYC-area  electronics & camera shops come to mind) are also notorious for cheap packaging.

When (not if) all states start collecting sales taxes *providing they have them* Amazon will take a serious hit. By then, the insiders will have cashed out, and the rest, well, business as usual - they are left holding the bag.


Thu, 07/26/2012 - 19:21 | 2655026 Max Cynical
Max Cynical's picture

Why would a seasoned company need to more than double the number of employees over 2 years while sales growth is slipping? Must be a new formula they teach in B school. 

Thu, 07/26/2012 - 20:27 | 2655174 lotsoffun
lotsoffun's picture

if we do the stats - we will probably see american employees has decreased, and offshore has tripled, because its' so much cheaper.  somebody - please prove me wrong again.  country of offshore? any guesses?  and so, they were hoping (and changing) that they would have more employees, many more and have cost cuts......

prove me wrong..  come on.  it's lots of fun!


Thu, 07/26/2012 - 19:27 | 2655035 sessinpo
sessinpo's picture

Another spot on logical analysis by TD. I've been buying crap off of Amazon and taking advantage of the free shipping and lower prices. These things (and no sales tax) are about to go away in the near future. Take advantage of Amazon while you can.

Thu, 07/26/2012 - 21:35 | 2655329 BeerBrewer09
BeerBrewer09's picture

I completely agree. Buy the $79 Prime membership and have *almost* anything sent to you in 2 business days (sometimes the next day) for free. The shipping alone is worth the annual membership. I let other members of my family order stuff from my account in exchange for cash. I also have an amazon credit card, so everything I buy earns me 3% back on future amazon purchases. You also get to sttream some videos and download kindle books. Why drive to the store when I can click a mouse from work and have "IT" in two days?

Thu, 07/26/2012 - 19:34 | 2655052 Unbezahlbar
Unbezahlbar's picture

Forget AMZN...stick with solid companies like zynga and FB.....[sarc-on]

Thu, 07/26/2012 - 19:53 | 2655097 Skoganmckonkie
Skoganmckonkie's picture

Big shops will say go long....translation=short..short...short

Thu, 07/26/2012 - 21:04 | 2655269 yrbmegr
yrbmegr's picture

Could it

Thu, 07/26/2012 - 21:38 | 2655335 AU5K
AU5K's picture

69K employees???  what the hell do they all do.  oh well, they didnt build it anyways.

Thu, 07/26/2012 - 22:14 | 2655376 Againstthelie
Againstthelie's picture

I'm buying a lot at Amazon and i'm wondering how they can make any profit, if they split up even cheap articles and ship them seperately in excellent packages? It's a great service, but if the packaging and shipping costs almost as much as the article, how can this work?

I also have the impression from reading in forums, that lots of people are just ordering things to try them out. Sadly the service seems to be too good for the shamelessness of the masses.

On the other hand i have also noticed, that Amazon Germany removed several publishers because of political reasons. You must know that in the meanwhile already ~10,000 people every year(!) are put on trial because of sharing their politically "incorrect" opinions in Germany. Much more than in the communist GDR. The censorship, banning (and burning!) of politically "incorrect" books has become also very widespread. And Amazon Germany tries to be even more strict and politically correct than the already ridiculous laws restricting free speech and removed even remaining legal ones. That's the reason why i had to buy the last books somewhere else. Also not really a boost for sales and business i guess.

Thu, 07/26/2012 - 22:37 | 2655430 Morrotzo
Morrotzo's picture

The Method

"The make no money to a small loss on every sale...but they make it up on volume."

This is a company trading at 300-1 Price/Earnings. That is diseased.

Also, FUCK Amazon for selling deliberately misrepresented, counterfeit and stolen goods.

"Wasn't as described. Was counterfeit. Was foreign." Go read how many reviews are like that. I ordered a few books from them and I had to watch my ass every single time. So much criminal shit I am done with them. The only way they stay in biz is by being crooks. 225 dollars a share is nuts. I'd rather invest in the Mafia. More honor.



Fri, 07/27/2012 - 02:40 | 2655642 Magnum
Magnum's picture

This is what I'm talking about below.  Amazon has somehow decided the customers don't matter, and beating their merchants up with an ever-expanding pile of new crappy vendors is going to work longterm.  Not.

Fri, 07/27/2012 - 02:37 | 2655640 Magnum
Magnum's picture

Try becoming a merchant at Amazon yourself--anyone can do it, then watch how Amazon sets all of the merchants against each other. Shopping at Amazon now is like buying from a flea market.  Tons of listings of products sold from the basement of homes when the customer thinks they are buying from some smart company called Amazon.  Reality is a different story and the avenue pursued by Amazon is not customer friendly, this should be carefully noted by potential investors.  I believe the poor goodwill this company is creating will backfire in a big way in coming years.  

Fri, 07/27/2012 - 12:23 | 2656969 krk
krk's picture

AMZN is as much in the business of selling stock as it is in the business of selling stuff.

I just took a snapshot of AMZN over the last five years, from 4Q07 to today's 2Q12 report.

The basic share count has gone up from 413 million to 451 million.

To that add the 15.3 million shares bought back, for a total share issuance of 53.3 million.

For these 53.5 million shares Amazon has issued, it received, calculated from the difference of the Paid-in Capital level in 4Q07 ($3,063 million) to the latest quarter's figure ($7,573 million), which works out to $4,510 million.

And during this time, total earnings from the retained earnings figure from 4Q07 to the latest one is $3,467 million.

So, you see over the past 5+ years, Amazon has raised more money from issuance of stock than from earnings, i.e. $4.5 billion vs. $3.5 billion.

So, the company is as much in the business of selling stock as it is in the business of selling stuff.

While this lasts, Amazon can ride the gravy train of having the stock market finance its payroll for technical and managerial talent with the gullible market absorbing the new shares at ever escalating prices keeping those exercising and flipping their shares happy at being paid in options than in dollars and at the same time allowing Amazon to also have a healthy paid-in capital flow from ever rising strike prices for the options to finance its expansion which itself is designed to enthrall the analysts and keep the fairy-tale narrative of world domination alive and the stock price levitated.

I guess the recent buyback and the authorized overhang of another $1+ billion is probably motivated not as much for “return of capital” to shareholders but to support its stock price whenever it starts flagging, something like the Fed & Treasury’s plunge protection team.

Sound like a nice virtuous cycle, as long as it can be kept going.

And also sounds Ponzi’ish but the question is what could trip up this pretty little game?

Poorer than drastically reduced estimates haven’t made a difference.

Guidance of losses ahead are just shrugged off.

Only if and when there is a defection in the cartel holding this gig up, all that the bears can do is watch in befuddlement and awe at Bezos’ perverse brilliance.

When Bezos said what I thought was silly blather “..Random forests, naïve Bayesian estimators, RESTful services, gossip protocols, eventual consistency, data sharding, anti-entropy, byzantine quorum, erasure coding and vector clocks ..” this modus-operandi is perhaps what he was talking about!


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