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Amazon stock dips after anaemic third quarter, tepid reception for Fire Phone - Page 2

post #41 of 122
Quote:
Originally Posted by SpamSandwich View Post

I still wouldn't buy their stock again. They are the epitome of a 'dead company walking'.

How many 'dead companies' have you seen have a $4 billion increase in sales? The loss isn't from a lack of business.
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post #42 of 122
Quote:
Originally Posted by sog35 View Post

Do you realize how many legitimate businesses and jobs were lost because they priced competition out?  It okay if they won because of fair practices.  But they are selling merchandise BELOW COST.

Do you really think that the competition would think it's 'OK' if Amazon won because of fair practices?

Walmart could have easily done what Amazon has done. Why didn't they adapt with the times?

You're intelligent, so do you know what Walmart did to Rubbermaid? If not look it up.
Edited by dasanman69 - 7/25/14 at 3:19pm
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post #43 of 122
Amazon has been a Bezos scam from day one. They remind me of the old joke that goes something like this. We've sold thousands of these watches and people ask, 'how do you make money on a watch you sell for less than you paid for it?' Answer: Volume! That's Amazon in a nutshell, so continue to grab the bargains until peckerhead Bezos sells his shares in the company and disappears, right around the time Amazon disappears.
Edited by thinkman@chartermi.net - 7/25/14 at 3:54pm
post #44 of 122

Have you checked out Amazon tablet sales relative to Apple tablet sales. Apple more than 10 to 1 over Amazon. FACT!

post #45 of 122
Quote:
Originally Posted by sog35 View Post
 

 

Let me illustrate it this way.

 

Suppose a business man comes to your town and opens 50 restaurant.  He opens a restaurant right next to every single restaurant in the town.  He puts a burger place right next to the Mom and Pop burger place.  He puts an italian place right next to the italian place that was there for 50 years.  But here is the kicker.  The business man decides to charge $1 per meal.  How long do you think the local restaurant will last? Now imagine if this Business man does this for 17 years.  

 

I don't care how loyal the people in the town are those competing restaurants will go out of business.  Then after 17 years the Business man decides to close all 50 restaurants and leaves.  The towns economy tanks and hundreds lose their jobs.  Later we find out that the Business man left with $20 Billion in his wallet.  Come to find out that the local government was subsidizing his restaurant the whole time using taxes you were paying each year.

 

That is what Amazon is doing.

 

The Business man is Bezo's.

The local government is Wall Street.

The towns people are you and me.  

 

Even if Amazon loses 80% of its value Bezo's is still going to make tens of BILLIONS of dollars.

So who's paying for this?  Like in that town its YOU and ME.

 

Some of it are individual investors who buy Amazon shares.  But most of it is the regular working class.  Do you own Mutual Funds?  Do you have a 401k?  Then chances are you own Amazon.  Amazon is part of any S&P500 Mutual Fund, Nasdaq Mutual Fund, any Tech mutual fund, and probably any growth mutual fund.  So each of us are funding Amazon or paying them 'taxes'.  We will be the ones holding the bag when this thing goes crashing down.  

 

Wall Street will make Billions because they got in on the ground floor with the IPO.  And you can be sure they will unwind their investment and cash in huge.  

 

So enjoy your $1 meals for now.  Just remember that we are all paying the 'taxes' to fund the largest PONZI scheme in the history of the world.

 

Excellent explanation, Sog35. But at the risk of being overly pessimistic it's even worse than you illustrate. Because those upstart restaurants that planted themselves next to the established local restaurants appear to be employing local workers in your example. And when they disappear, you can imagine local entrepreneurs popping up to take advantage of the restaurant vacuum. However, in reality, Amazon is sneaking off with local capital without pumping any of it back into it or giving anybody local jobs. And most likely they will not be disappearing any time soon. So homegrown local restauranteurs won't likely get another good opportunity to jump back in. Amazon is evil from the perspective of the traditional community based economies we grew up with. And the people who think "it will all work out for the best. Let the market decide" are not thinking it threw. They are just deciding to hope for the best without applying intelligence and common sense to estimate the logical consequences.

post #46 of 122
Quote:
Originally Posted by schlack View Post

Amazon is leading the online retail market. I'm surprised there's so much hate here for the company and/or stock. They took a loss because they offered cut throat pricing and invested heavily in their future. Not because they have bad products or a bad business model or bad management.

I see the 10% drop as a buying opportunity.

 

But, the size of the online retail market is not as big as their bloated stock price justifies. By its very nature, retail operates on razor thin margins and in order to justify a high market cap, those companies have to report exceptionally high revenues and/or margins. Keep in mind that Walmart's revenues dwarf Amazon's by more than six times over, and Amazon's total revenues only outpoint Best Buy by about 30%.

 

Amazon's valuation is  based on an expectation that there will be a payoff sometime down the road. That their current and historically non-existent profits will transform into consistent and growing profits in the future. That Bezos' investments will transform the company into a profit-making machine in the future. That their double digit revenue growth will continue for years to come.

 

That belief has subsidized all of their infrastructure investment and dabbling with media and cloud services. That belief allows Amazon to take losses on their operations in order to grab market share, and in essence, devalue other businesses that have to actually make money in order to survive.

 

If that belief breaks down, if Amazon's revenue growth shows signs of plateauing, then Amazon's stock becomes a house of cards, and it will be judged by the same metrics as other retailers and/or service providers. Increasingly, investors now wonder just when Amazon will flip the proverbial switch and start making the kind of money that actually justifies their stock price.


Edited by Woochifer - 7/25/14 at 4:01pm
post #47 of 122
Quote:
Originally Posted by dasanman69 View Post


How many 'dead companies' have you seen have a $4 billion increase in sales? The loss isn't from a lack of business.

$4 billion gross, -$300+ net. It's from a lack of profits!

post #48 of 122
Fire phone represents exactly the kind of innovation apple doesn't do yet is expected of it by everyone.
post #49 of 122
Quote:
Originally Posted by thinkman@chartermi.net View Post

$4 billion gross, -$300+ net. It's from a lack of profits!

Exactly. They lack profit because they choose to, not because business is down.
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post #50 of 122
Quote:
Originally Posted by sully54 View Post

Fire phone represents exactly the kind of innovation apple doesn't do yet is expected of it by everyone.
Like Samsung's increasingly desperate attempts, Amazon confuses innovation for pointless and badly implemented gimmickry. But at least Samsung already has a substantial user base, even though their profits are shrinking. Amazon has no user base in phones, just a very expensive attempt to buy market share, one that looks like it's going to flop spectacularly. When the implications of this finally sink in, a 10% stock price dip will look stupidly tiny.
post #51 of 122
Quote:
Originally Posted by dasanman69 View Post

Exactly. They lack profit because they choose to, not because business is down.

If they choose profits there revenue growth will slow down or stop all together.

Amazon is not going out of business but I expect the stock to go down 50-60%
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post #52 of 122
And people wonder where all the US jobs are going?

Amazon is killing a ton of jobs and using the middle classes 401k to subsidize there losses.
Go check your 401k and I almost guarantee your Mutual Fund includes Amazon.
Once the stock tanks Mr Bezo's and his Wall Street friends would have already cashed out and made tens of Billions.
While everyone 401k will be a little bit smaller.
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post #53 of 122
Quote:
Originally Posted by schlack View Post

Amazon is leading the online retail market. I'm surprised there's so much hate here for the company and/or stock. They took a loss because they offered cut throat pricing and invested heavily in their future. Not because they have bad products or a bad business model or bad management.

I see the 10% drop as a buying opportunity.

They have been "investing in thhe future" for 18 years. Eventually they need to actually make some money.
post #54 of 122
Quote:
Originally Posted by sog35 View Post

And people wonder where all the US jobs are going?

Amazon is killing a ton of jobs and using the middle classes 401k to subsidize there losses.
Go check your 401k and I almost guarantee your Mutual Fund includes Amazon.
Once the stock tanks Mr Bezo's and his Wall Street friends would have already cashed out and made tens of Billions.
While everyone 401k will be a little bit smaller.

Technology always kills jobs. Digital music killed B&M music stores, digital photography killed film processing businesses. What Amazon is doing isn't new, and has happened a million times over.
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post #55 of 122
Quote:
Originally Posted by dasanman69 View Post

Technology always kills jobs. Digital music killed B&M music stores, digital photography killed film processing businesses. What Amazon is doing isn't new, and has happened a million times over.

Difference is those companies that killed jobs and business (like Apple) made profit.
Amazon has not made any significant profit in 17 years.
They survive because they are living off of everyones 401k. Thats the difference.

Its a Ponzi scheme. The stock will lose 80% of its value but Bezos and his Wall street friends would already have there billions while our 401k will be worth less.
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post #56 of 122
Quote:
Originally Posted by allenbf View Post

No, I don't.  But Amazon's hardware products aren't even in the same league as Apple, so there are no worries there.  I just don't see this as Apple vs Amazon, sorry.  I won't be buying their stock but they're still a great company in my opinion.

I agree. The fire phone might be priced like an iPhone, and marketed as a "sweat the details" phone, but people know the difference.

Amazon built a business on being the online equivalent of Wal-Mart.

"Apple should pull the plug on the iPhone."

John C. Dvorak, 2007
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"Apple should pull the plug on the iPhone."

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post #57 of 122

In business, you have to be willing to make investments in order to create future revenue streams. But eventually, those investments have to bear fruit. Amazon has been around for nearly 20 years. It's just not going to work to continually trot out the same line that "we're focused on the long term," especially when the market has rewarded Amazon with a high P/E multiple. Also, Amazon has refused to give any information about how its "investments" are performing. Investors can't make an accurate projection of Amazon's investments. 

 

Amazon's business strategy also isn't particularly innovative. During the dot-com era, many companies attempted to employ Amazon's strategy. They sold venture capitalists on the idea of building mindshare first and then becoming profitable. Company after company followed the typical dot-com blueprint. Sell hot air disguised as a brilliant idea and get a VC to write a multimillion dollar check. Go public and watch the stock go into the stratosphere. Post loss after loss and placate investors with grandiose projects about how once the company builds mindshare, profits will follow. Needless to say, that strategy didn't work. Once companies burned through their VC funding, they quickly went bust. 

 

Amazon is one of the few survivors of the dot-com bubble. It has succeeded in employing the strategy that many dot-coms tried but failed to implement-spend their way to the top. Amazon "disrupted" a lot of industries, but I wouldn't say that they accomplished that by offering superior technology. It was by selling products below cost and eating losses. They had superior financial muscle, something that competitors didn't have. As a result, competitors got priced out of the market. The strategy of outlasting competitors in eating losses only works as long as there is cash to cover expenses. Once the money dries up, that strategy won't work. 

post #58 of 122
Quote:
Originally Posted by allenbf View Post

I really don't understand the gloating of Amazon taking a hit?  Is it because they're a "competitor" of Apple?  (I don't even see them as a competitor, personally).

anyone who blatantly rips off Apple with their iKnockoffs and iPhoneys and try to profit off of Apple's hard work will get crapped on by the Apple community.

I thought amazon would be the first company to develop a new phone but the fire phone looks so much like iPhone it makes the galaxy s look like a distant cousin.
post #59 of 122
Quote:
Originally Posted by KPOM View Post

They have been "investing in the future" for 18 years. Eventually they need to actually make some money.

They are making money, they're just not hoarding it the way Apple does.
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post #60 of 122
Quote:
Originally Posted by vvswarup View Post

In business, you have to be willing to make investments in order to create future revenue streams. But eventually, those investments have to bear fruit. Amazon has been around for nearly 20 years. It's just not going to work to continually trot out the same line that "we're focused on the long term," especially when the market has rewarded Amazon with a high P/E multiple. Also, Amazon has refused to give any information about how its "investments" are performing. Investors can't make an accurate projection of Amazon's investments. 

Amazon's business strategy also isn't particularly innovative. During the dot-com era, many companies attempted to employ Amazon's strategy. They sold venture capitalists on the idea of building mindshare first and then becoming profitable. Company after company followed the typical dot-com blueprint. Sell hot air disguised as a brilliant idea and get a VC to write a multimillion dollar check. Go public and watch the stock go into the stratosphere. Post loss after loss and placate investors with grandiose projects about how once the company builds mindshare, profits will follow. Needless to say, that strategy didn't work. Once companies burned through their VC funding, they quickly went bust. 

Amazon is one of the few survivors of the dot-com bubble. It has succeeded in employing the strategy that many dot-coms tried but failed to implement-spend their way to the top. Amazon "disrupted" a lot of industries, but I wouldn't say that they accomplished that by offering superior technology. It was by selling products below cost and eating losses. They had superior financial muscle, something that competitors didn't have. As a result, competitors got priced out of the market. The strategy of outlasting competitors in eating losses only works as long as there is cash to cover expenses. Once the money dries up, that strategy won't work. 

Superior technology doesn’t always win. Plasma was vastly superior to LCD and they're not longer being made. The dot coms went belly up because people simply stopped buying from them. Though Amazon lost money their business actually went up by a lot. One can survive a long time by threading water and keeping one's nose just above the water.
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post #61 of 122
Quote:
Originally Posted by dasanman69 View Post

Exactly. They lack profit because they choose to, not because business is down.

Not necessarily. If they lose all their business as soon as they try to take a profit, they aren't really doing it by choice.

They "choose" to not take a profit because their business model would collapse if they did.
post #62 of 122
Where to even begin on this one?

Okay, first, what Buffett has to say regarding such companies:

The worst sort of business is one that grows rapidly, requires significant capital to engender the growth, and then earns little or no money.
- Warren Buffett

And then there's my own thoughts:

If you want to make tablets, video streaming hockey pucks and smartphones, essentially shadowing Apple's lines of business, you should expect to be assigned Apple's P/E.

and

Could it be that $800 million in expected Q3 losses is Bezos' early admission that the Fire phone is a flop? An $800 million write-down next quarter should just about cover it.
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post #63 of 122
Quote:
Originally Posted by dasanman69 View Post

They are making money, they're just not hoarding it the way Apple does.

Eventually, even if the company takes 100% of its competitor's business and causes every single one to fail, it will have inherited business that the market has traditionally assigned a multiple closer to that enjoyed by its long existing competitors. If the business is twice as efficient or exceeds the business models of its peers in some other meaningful way, it may get a multiple that is twice as high, but still far lower than it enjoyed during its build out phase. If the leader of that company during its build out phase is considered a genius because he sacrifices profits to the gods of growth (how much genius does that take really?) then he may be considered anything but a genius during the period of multiple compression that comes when the rapid growth phase ends and he is expected to now grow profits at a similar rate to the rate of revenue growth the company realized during the grow-at-the-expense-of-profits phase. If he is unable to do so, sentiment regarding his genius may turn quickly into calls for his head while the share price adjusts to the reality of the profit margins attainable for the business he is in.
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post #64 of 122
It is plain to see that Amazon's business model is to sell at unsustainably low prices to drive out the competition and once the monopoly has been established, to start charging monopoly prices (a.k.a. Start gouging). Anyone who says that such a strategy is, in the long run, good for consumers and society as a whole is either an idiot or goes by the name of Jeff Bezos.
post #65 of 122
Amazon is going down. I don't care how big your volume is. You can't sustain a company with a business plan to bleed money now and somehow make it later on digital content sales. The only question is how it's going down, Hindenburg or Goodyear Blimp with a large leak.

It will be better for the US economy if Amazon goes down slowly over a year. My fear is that it spectacularly combusts in a short panic filled couple of days. If that happens, as it did with Eron and Countrywide or some of the investment banks, then the average person will end up paying. Markets will roil and I'll bet you anything the US Govt slash taxpayer will have to bail BeZos out on TOP of everything lol.

Hope I'm wrong on that one !

I don't mind capitalism run amok to create super companies but not if they're going to tank te economy when everyone realizes the emperor has no clothes lol.
post #66 of 122

 Can someone do the math and see what Apples Stock price/Market cap  would be  if it had the same P/E ratio , 505,48, as Amazon...??  With the actual volume of individual Orders they have why don't they just do a nominal "transaction" fee.. below $20  /  .05c  $50  / .50c    $250   $1.00 etc..  Having said that the other thing that is looming on their horizon is countries cracking down on the tax loophole. I live in Frankfurt, Germany, Amazons 2nd biggest market and on sales last year in Germany of $8.7 Billion they paid just $3M in tax.. this will end at some points as countries stop the use of the Double Dutch... Does not look good  http://www.reuters.com/article/2013/07/12/net-us-amazon-germany-tax-idUSBRE96B0HO20130712

post #67 of 122
Quote:
Originally Posted by dasanman69 View Post

They are making money, they're just not hoarding it the way Apple does.

Every once in a while you let slip something that plainly shows what an outsider you are here.

To your "point," Apple is amassing that money for a purpose, not hoarding it. Remember their stated mission is to change the world for the better by making products and services that people want to use. If you don't think Steve and his pals have thought of some really big future projects, then you have yet to learn anything from Apple at all.
post #68 of 122
I own a few shares... Ouch!
post #69 of 122
Quote:
Originally Posted by RadarTheKat View Post

Could it be that $800 million in expected Q3 losses is Bezos' early admission that the Fire phone is a flop? An $800 million write-down next quarter should just about cover it.

Steve Ballmer didn't survive a $900 million write-down of unsold Surfaces. The board would be crazy to let Bezos write-down $800 million and remain CEO for another year.

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John C. Dvorak, 2007
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post #70 of 122
Quote:
Originally Posted by allenbf View Post

I really don't understand the gloating of Amazon taking a hit?  Is it because they're a "competitor" of Apple?  (I don't even see them as a competitor, personally).

I enjoy the hell out of my Amazon Prime membership.  I am not interested in owning any of their hardware, but Amazon is a great retailer & they'll be around a long time to come.  

I'm not gloating. In fact I love some of their products, like the used books and used CDs. Oh, wait, that's the stores they serve as a portal for. Anyway, While you see them being around for a long time to come, I grew up thinking the same about Sears and Roebucks. Who would have guessed they would have slipped so far in my lifetime.
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post #71 of 122
Quote:
Originally Posted by sog35 View Post

Quote:
Originally Posted by dasanman69 View Post

Exactly. They lack profit because they choose to, not because business is down.

If they choose profits there revenue growth will slow down or stop all together.

Amazon is not going out of business but I expect the stock to go down 50-60%

If Amazon doesn't make profits and declares big loses, the FTC might get all over them for predatory pricing... which in some cases is true. I wonder at times if Barnes and Noble still being in business might be what keeps the watchdogs off of Amazon. The final insult is that like spas that sell "memberships" to cash flow themselves, Amazon sells "Prime memberships" to their biggest suckers spenders, and according to this report has burned through all that money too... what will be their next "sucker" game to squeeze a bit more milk out of the teat?

Incidentally if Amazon were to go down 50% to 60%, what wouldn't you bet that Apple will slide down along with it... just because? 1wink.gif
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post #72 of 122
Quote:
Originally Posted by thinkman@chartermi.net View Post

Have you checked out Amazon tablet sales relative to Apple tablet sales. Apple more than 10 to 1 over Amazon. FACT!

I don't see how you can say FACT since when did Amazon ever say how many 'tablets' they've sold (or shipped)? The only company (that I know of) with the guts to give out numbers of what they've sold is Apple, so whilst your 10:1 ratio may be correct, we'll never know!
post #73 of 122

I will keep buying from Amazon.

 

1. I got products at low cost,

2. I don't care if Amazon is making money or not.

3. I care even less for the stupids who invested in a company with P/E Ratio of 500. If you allow others to do the thinking on behalf of you, you always end up allowing them to rip you off. Sorry for the harsh words but this is reality.

post #74 of 122
Quote:
Originally Posted by Flaneur View Post

Every once in a while you let slip something that plainly shows what an outsider you are here.

To your "point," Apple is amassing that money for a purpose, not hoarding it. Remember their stated mission is to change the world for the better by making products and services that people want to use. If you don't think Steve and his pals have thought of some really big future projects, then you have yet to learn anything from Apple at all.

Semantics, and please stop with the 'change the world' self-aggrandizement. Penicillin changed the world, immunizations changed the world, indoor plumbing changed the world. A few touchscreen devices have not changed the world, and if it has it's been for the worse. The younger generation is getting dumber though the have a wealth of information at their fingertips, and there's been a exponential increase in vanity, and narcissism.
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post #75 of 122
Quote:
Originally Posted by tundraboy View Post

It is plain to see that Amazon's business model is to sell at unsustainably low prices to drive out the competition and once the monopoly has been established, to start charging monopoly prices (a.k.a. Start gouging). Anyone who says that such a strategy is, in the long run, good for consumers and society as a whole is either an idiot or goes by the name of Jeff Bezos.

Yet many of the purchases I make through Amazon are fulfilled by someone else. Amazon just handles the transaction (sound familiar?). In this case they're helping the competition not eliminating them.
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post #76 of 122
Quote:
Originally Posted by dasanman69 View Post

Exactly. They lack profit because they choose to, not because business is down.
They should become a non-profit, then.
Quote:
Originally Posted by jungmark View Post

Well they do sell the generic branded stuff.

They don't make commercials or ads saying their competitors stuff is crap in comparison.
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post #77 of 122
Quote:
Originally Posted by schlack View Post

Amazon is leading the online retail market. I'm surprised there's so much hate here for the company and/or stock. They took a loss because they offered cut throat pricing and invested heavily in their future. Not because they have bad products or a bad business model or bad management.

I see the 10% drop as a buying opportunity.

I think it comes because many people no longer have a book store to go and purchase/skim new releases. Borders and other mega chains killed the small local shops but at least they were local. You could go and browse new books and buy them.

Amazon's predatory pricing (anyone can grow selling at a loss) has driven many of these stores out of business. Amazon's continued losses have more to do with supporting existing business and less to do with investing in the future business.
post #78 of 122
Quote:
Originally Posted by sog35 View Post

Let me illustrate it this way.

Suppose a business man comes to your town and opens 50 restaurant.  He opens a restaurant right next to every single restaurant in the town.  He puts a burger place right next to the Mom and Pop burger place.  He puts an italian place right next to the italian place that was there for 50 years.  But here is the kicker.  The business man decides to charge $1 per meal.  How long do you think the local restaurant will last? Now imagine if this Business man does this for 17 years.  

I don't care how loyal the people in the town are those competing restaurants will go out of business.  Then after 17 years the Business man decides to close all 50 restaurants and leaves.  The towns economy tanks and hundreds lose their jobs.  Later we find out that the Business man left with $20 Billion in his wallet.  Come to find out that the local government was subsidizing his restaurant the whole time using taxes you were paying each year.

That is what Amazon is doing.

The Business man is Bezo's.
The local government is Wall Street.
The towns people are you and me.  

Even if Amazon loses 80% of its value Bezo's is still going to make tens of BILLIONS of dollars.
So who's paying for this?  Like in that town its YOU and ME.

Some of it are individual investors who buy Amazon shares.  But most of it is the regular working class.  Do you own Mutual Funds?  Do you have a 401k?  Then chances are you own Amazon.  Amazon is part of any S&P500 Mutual Fund, Nasdaq Mutual Fund, any Tech mutual fund, and probably any growth mutual fund.  So each of us are funding Amazon or paying them 'taxes'.  We will be the ones holding the bag when this thing goes crashing down.  

Wall Street will make Billions because they got in on the ground floor with the IPO.  And you can be sure they will unwind their investment and cash in huge.  

So enjoy your $1 meals for now.  Just remember that we are all paying the 'taxes' to fund the largest PONZI scheme in the history of the world.

I agree 100% with this post. This has been my thought on Amazon as well for several years.
post #79 of 122
Quote:
Originally Posted by dasanman69 View Post

How many 'dead companies' have you seen have a $4 billion increase in sales? The loss isn't from a lack of business.

It is easy to sell at a loss.
post #80 of 122
Quote:
Originally Posted by Steven N. View Post

It is easy to sell at a loss.

Not when you want to invest in developing new products and services.
"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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"Few things are harder to put up with than the annoyance of a good example" Mark Twain
"Just because something is deemed the law doesn't make it just" - SolipsismX
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