

The Party Is Over for Amazon - smacktoward
http://www.newrepublic.com/article/120464/amazons-revenue-growth-has-fallen-making-investors-nervous

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GabrielF00
TNR's coverage of Amazon has been astonishingly biased. For instance, they
printed a ridiculous article by advice columnist Margot Howard, whose book was
poorly reviewed by Amazon customers and who concluded that readers couldn't
possibly come up with a useful review. She wrote: '"Book Reviewer" is
considered a profession, and reviews are done by other writers. Good sense
would seem to militate against any group of people unschooled in creative and
critical reviewing coming up with a worthwhile review.'[1]

I think that, when it comes to Amazon, TNR has a giant chip on its shoulder. I
think a lot of this criticism has to do with a liberal arts-educated, New York
and Washington-based cultural elite that sees itself as eclipsed by Seattle
and Silicon Valley upstarts who studied computer science.

[1][http://www.newrepublic.com/article/119875/margo-howard-
amazo...](http://www.newrepublic.com/article/119875/margo-howard-amazon-vine-
reviewers-sabotaged-my-book)

~~~
hkmurakami
As a former DE Shaw guy, Bezos sure knows how to stick it to New York and Wall
Street.

I had a good laugh when I read about their latest bond offering (very smart
considering the interest rate environment and the impending rate hikes) and
Moody's subsequent downgrade. Bezos is trolling Wall Street and Wall Street is
not happy.

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ethanhunt_
Article is a hit-piece; author is being willfully ignorant/misleading.

> Amazon’s newest investments aren’t paying off. The most notable failure has
> been the Fire phone, which has received terrible reviews. > And the Fire
> phone was a big bet that has not worked.

He says this as if the Fire phone will now be canceled so that Amazon can try
some other random experiment. The Fire phone was the first iteration of what
will be a very long experiment, the same as every other product launched by a
large corporation (e.g., Android, iOS, Kindle Fire tablet). How many times
have we heard "It's over, Google's Android is finished" in the past decade,
only to now see Android sales accelerated way beyond iOS and iOS sales
stagnate?

The above is obvious to anyone who follows tech, thus leading me to believe
the author has crafted a hit piece.

Disclaimer: I am employed by Amazon and own Amazon stock.

~~~
NicoJuicy
I never heard: it's over Google Android, on the contrairy. I have been a fan
from the start (just i have been from Apple (not anymore)) and from Microsoft
(.Net developer) - that love has renewed since Nadella :)

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dkbrk
I believe Amazon's revenue growth is slowing because they're beginning to
saturate the consumer market. However, they're only just beginning to
penetrate B2B supply
([http://www.forbes.com/sites/clareoconnor/2014/05/07/amazons-...](http://www.forbes.com/sites/clareoconnor/2014/05/07/amazons-
wholesale-slaughter-jeff-bezos-8-trillion-b2b-bet/)).

Many large internet companies have fundamentally dubious business models.
Google and Facebook come to mind, both have advertising as their primary
source of revenue, making their users the product.

Amazon, on the other hand, provides something of enormous intrinsic value: the
supply of any and all physical goods that can be put in a warehouse. This
business is not going anywhere, and Amazon is only going to get better at it
(faster, lower overhead, more products).

In the scheme of things, Amazon's other offerings (AWS included) are
relatively unimportant. IaaS and PaaS are relatively fungible, as is evidenced
by Amazon's competitors (i.e Azure). Taking a loss of a few hundred million
dollars on the Kindle Fire is a rounding error relative to Amazon's revenue,
the amount invested yearly on new infrastructure and capital reserves.

Also, if Amazon is issuing unsecured debt, it simply means more capital is
needed to sustain the desired rate of infrastructure investment.

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Yhippa
How is this on the front page? It is all unsubstantiated forward-looking
speculation. Does he have access to figure business plans or something?

~~~
frinxor
This article is worthless, and I was thinking HN needs a flag option... and
then I realized it already has one! I clicked it of course ;), and you should
too!

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WalterBright
Amazon's forward P/E is 366. Clearly, investor confidence in Amazon's strategy
is hardly over. (A usual P/E is around 15.)

~~~
ericglyman
Price to Earnings (P/E) is literally the least relevant metric to use for
Amazon. Given the company's very public approach to seeking zero net earnings
(while maximizing capex/investment), the denominator will always skew the
ratio to levels that make it non-meaningful.

EV/Sales (LTM and Forward) are much more in line with other comparables.

~~~
mbesto
I don't think you understood the OP's point correctly - their forward P/E, aka
what earnings the investors expect the company to make in the future, is
abnormally high, thus indicating investors are still quite bullish.

~~~
ericglyman
I understood it. Forward P/E is typically next year's P/E. Investors expect
nearly $100B in revenue, but almost no earnings (1/366th). Because the
denominator is expected to be SO small (against such large earnings), the
forward P/E ratio will also be ridiculous and not very meaningful.

No denying that many Amazon investors are bullish, but this is not the metric
to prove that point. Other relevant drivers at play.

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nitin_flanker
Though the revenue is declining but venturship of Jeff is growing days by
days. He wants to see millions of people to work on space and living there
also. The other company of him is ready to compete with SpaceX.

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Beached
Jeff has always ignored the stock Market, the company is self sustaining and
he doesnt need nor care for wall street.

~~~
jbigelow76
Google the term "activist investor".

A Carl Icahn type (or more likely Carl Icahn himself) could potentially force
Jeff to reconsider the detached attitude.

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ww520
How much stock does Jeff have? Can he retain control easily?

~~~
wonderyak
[http://www.nasdaq.com/symbol/amzn/institutional-
holdings](http://www.nasdaq.com/symbol/amzn/institutional-holdings)

[http://www.nasdaq.com/quotes/insiders/bezos-
jeffrey-p-48340](http://www.nasdaq.com/quotes/insiders/bezos-jeffrey-p-48340)

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fmueller
How can $273 million in profit be a bad sign at all? Sometimes I don't get
oeconomics.

~~~
bildung
_How can $273 million in profit be a bad sign at all? Sometimes I don 't get
oeconomics._

Because in the context of the 75 billion in revenue needed to generate the 273
million in profit, thats a profit rate of 0.0004%. So every tiny false step
puts the company in the red.

The numbers basically show that amazon rides a conceiled loss leader strategy
for many years now. Thats traditionally a quite risky move, because once
you've crushed competition and saturated the market, you've reached the point
where you _have_ to make profit or go insolvent. But generating profit would
involve raising prices, which would give the competition more breathing space
- amazon essentially has to give up market share to not go bankrupt.

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ChuckMcM
Warning: Autoplay audio

