The key to ordering a lot and not paying for shipping each time. If I can avoid going out and buying from stores I do. I order dog food and other normal household stuff all the time. I cant speak for the streaming, I really only have it for free 2 day delivery.
You could say the same about bitcoin or webvan or pets.com. Just because there is a madness among the masses that doesn't mean the fundamental analyses is wrong. Any company eventually has to make money. I always thought exactly the same as the OP said, Bezos was a short of con artist. He started out selling books, and when it was not profitable, he switched the profile. He kept switching, but the profit never came. Now they are producing TV series and such, but where are the profits? Not to mention nowadays there is no point in building huge and costly warehouses when Amazon is just the 3rd party between a producer and the buyer and the maker of the goods can directly ship to the buyer. So all they need is a giant server, no need for warehouse. I love Amazon as a costumer but not as an investor who would like to see profits eventually. And for those idiots who keep bringing up the charts, do you want me to show high flying companies' charts that don't exists anymore? Eventually the basic economic principles win over wishful thinking and following the masses. The same thing about Netflix, I love the service, but the company is built on huge debts and very little profits. That will come crashing down too.... P.S.: Why am I not surprised? "Amazon.com was involved in pets.com's first round of venture funding. " http://en.wikipedia.org/wiki/Pets.com
You've said it yourself. Amazon started off selling books. Now they sell everything, provide third party selling "booths", cloud computing services, a search engine no one used, a streaming service, and pioneered the e-reader. Where did that money come from? They don't really issue debt. They don't do secondaries in their stock. They are playing one of those tycoon video games where the strategy is to be the biggest the fastest and unlike other companies they don't give away any services so there is a precedence for payment. I would wager amazon could be very profitable if they wanted to. Instead tey are trying to dominate all forms of commerce on the web.
Some of you are missing the point. Gundlach is a smart guy. He's made what i think is a very astute comparison--investor tolerance for AMZN never making money is tied to confidence in the market as a whole. AMZN is like the canary in the coal mine. If it falters, pay attention. Other than that, he is making a pretty standard observation among market pros. AMZN is selling the dream, very successfully as it turns out. I don't think it is totally irrational. AMZN is not a one trick pony like FB or TWTR. Retail is a low margin business, but AMZN dominates it online and there are pretty huge barriers to entry. They are using their scale to expand into other areas like streaming and the cloud. One of them could turn into a homerun at some point. I don't see how you can justify investing in AMZN on fundamental grounds, but it is what it is.
Jeff Bezos is not conning anyone, he is a great innovator and amazon is doing some amazing things. All the numbers published are real. It's not amazon or jeff bezos's fault if the street prices a -eps company with 180 billion market cap.
This thread is hilarious. ET is a trading site, not an investing site. Who gives a damn if Amazon is minting coin or riding a bubble? Oh yeah ... investors. But this is a trading site. We get in, we get out, hopefully with a profit. If you're concerned about being "married" to Amazon, congratulations, you're a sadsack investor. My sympathies. As a trader, I'm just hooking up for a short-term profitable fling. Much less stress on both the wallet and the nerves.
True 'dat... Bezos is buying market share? Maybe he feels compelled to do so because he uses what is still emerging technology for a lot of people. Any idiot can [and does] shop at Walmart, all the emerging tech they use [just in time delivery system] is completely transparent to shoppers. It takes a computer and some basic skills to shop via Amazon so they have to build up their business more carefully. Does anybody do online sales better than Amazon? I've used them since their inception and never, ever, had a problem. They started with a clean slate instead of mimicking shopping in a store and they did a fantastic job of it.
There is simply no requirement for the market to use EPS as a benchmark at any given point. When the day comes that investor sentiment demads earnings this could well be a fine short.