"“In our business the markets don’t just go up; markets go down too,” he said in the Bloomberg TV interview. “If you have an exceptionally successful business model and you’re one of the FAANGs, do you want to move into a business where 40 percent of the time you’re going to disappoint your clients?” his statement is disingenuous. he is looking for a takeout bid with a fat premium from Amazon.
Sounds more like a guy who is scared shitless. And for good reason, the brokerage business and its entire regulatory archaic framework is so corrupted, antiquated and inefficient that any member of the clan should be scared of an Amazon entering the business. We all know Bezos only enters now business areas with a solid and well thought through business plan, with lieutenants who are the best in the industry to assist him and lots of passion to disrupt. In contrast the entire American regulatory framework is mostly a self regulated mafia like web of operators who fill each others' pockets.
there is so much fat in the brokerage business. if bezos took them over he could cut expenses severely and make a ton of money in the process. considering the state of the stock market even a take under bid might be accepted.
My bet is that if Amazon ever entered the investment industry they would build their own platform from scratch. Most brokers and banks are running on hopelessly inefficient platforms that suffer from uncountably many takeovers and mergers. Entirely counter Amazon's business model.
exactly. six years after taking over another firm Schwab has not fully integrated their platforms there was an article in Barron's describing the situation.
How does Amazon entering change anything about the regulatory framework? Amazon isn't particularly known for knocking down regulation or competing in highly regulated industries, that would be an Uber type company.
They will have enough muscle to, for example, push for a revamped and new settlement protocol and procedures. Banks would have to spend even more than a player who starts from scratch to adopt to that. What Amazon is definitely known for is a business model that works for its customers not against.
I come from silicon valley, I'm an entrepreneur, I've started a fintech company. And it's a bit of a pet peeve of mine to see those outside the tech world think that somehow tech can wave a magic wand and turn a highly regulated industry with powerful incumbents into a magical leprechaun forests where Jeff Bezos rides around on his unicorn. It makes no sense whatsoever from a strategy perspective that Amazon, which has never even operated in a highly regulated industry let alone overturned one, would decide that the next most logical target is the brokerage business and overturning a hundred years of regulation. And that's only one reason of dozens why it makes no sense. I'm a big fan of Amazon, and for that reason would hate to see them do something as dumb as enter the brokerage business.