Warning: cynicism alert!!!
So, Amazon has missed its target (surprise, surprise) and its stock price has gone down by 10%, as investors realise that the Emperor really may not have any clothes. In other words, Jeff Bezos really doesn’t know what he is doing on a macro scale. Oh, sure, he may have some good ideas, but he also has some real clunkers. Want numbers? Here’s numbers:
The world’s largest online retailer yesterday reported a second-quarter loss of $126 million, more than double what was predicted, even as sales climbed 23 percent to $19.3 billion. Expenses jumped 24 percent to $19.4 billion.
And you know what the crazy part about investing in Amazon is? Want more numbers? You can’t have them. No-one knows what’s going on in there, because they never tell us.
Key portions of its business are absent from its financial reports, including Kindle sales, membership figures for the $99-a-year Prime program, and the profit it collects from its main online store.
(all this comes from Bloomberg)
Is this really a value investment when we have no idea what’s going on inside the company? In fact, even though the shares are falling, maybe this would be a good time to short Amazon:
…there’s little sign sizable profits are coming and Amazon issued a forecast yesterday for a wider loss in the third quarter.
Oh, goody. And you can’t blame it on market conditions. A major competitor of Amazon’s is turning a profit. Yes, Jeff, that’s one of those funny situations where you actually take in more money than you spend:
Amazon’s lack of profits stands in stark contrast to Alibaba Group Holding Ltd., which has better margins and is planning an initial public offering soon. The Chinese Web retailer disclosed in a prospectus in May that its profit totaled $2.8 billion for the nine months ended Dec. 31 on revenue of $6.5 billion. Amazon earned $274 million for all of 2013 on sales of $74.5 billion.
The difference between “visionary” and “fucking lunatic” is sometimes hard to see. But after this amount of time, it should now be possible to see that Amazon is not really “visionary”. Mind you, it’s not just Amazon where “investors” (the fancy name for gamblers with other people’s money) seem to have a blind spot:
Forty-seven percent of financial professionals view the equity market as close to unsustainable levels, while 14 percent already see a bubble, according to a quarterly poll of 562 investors, analysts and traders who are Bloomberg subscribers.
And if that depresses you, take comfort from the fact that at least a few people are getting rich out of selling… nothing, really:
Bloomberg’s Adam Johnson reports that Facebook founder Mark Zuckerberg saw his wealth increase by $1.6 billion on the company’s surging stock price.
The free market in action.