A news leak in the lead-up to earnings always gives pause, especially when the company in question is as savvy and manipulative of public perception as Amazon (AMZN).
First up: the back-story. Amazon jumped into the tablet fray with the Kindle Fire and is competing with all the usual suspects, from Apple (AAPL) to Google (GOOG). But from its birth, Amazon has made an art form out of shading and tilting the truth. They'll tell you something sold better than anything in their history, without giving you a clue as to raw sales numbers, let alone profits.
In other words, they play the public relations game … and play it hard and fast. You know what Amazon calls Apple, no slouch in the toying with public opinion game? An amateur.
I'm kidding, of course. Sort of.
Now today-three days before Amazon reports earnings in what is shaping up as a supremely difficult quarter--for God's sake, even McDonald's (MCD) disappointed-Reuters reported a scoop: a high-placed Staples (SPLS) official -- Demos Parneros, president of U.S. Retail for the company -- said that Amazon is poised to unfurl five or six new varieties of tablet.
The rumor makes a degree of sense. It comes with an actual name attached. Moreover, it matches Amazon's kitchen sink mentality. Why come out with one tablet when you can unleash a half dozen? Plus, it does seem (though it's still uncertain and largely untold) that Amazon is selling ancillary products to good effect through the Kindle Fire.
But the timing of the leak gives pause. When big product rumors come as a curtain opener to earnings it often means: tool of distraction. In a messy first quarter, Amazon still managed to best expectations, but they are in the midst of one of their over-the-top spending sprees and the economy has degraded considerably over the last three months.
Is the timing of the tablet scoop a total coincidence? Could very well be. But I wouldn't bet on it. I say news of the sack of new tablets -- even if true -- is designed to compensate for questionable earnings, serving as the typical Amazon tool of distraction. Considering, remain on guard while approaching Thursday's second-quarter earnings release.