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Alex Cho

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  • Missing The Point On Amazon's Margins [View article]
    Wow, did you know that Instagram and Vine use Amazon Web Services? Amazon obviously has lower gross margin figures than the ones i had calculated. I said that in my article.

    You're really smart you know that. With data usage expected to skyrocket in the future, I'll let you take the title of expert.
    Feb 19 02:32 PM | Likes Like |Link to Comment
  • Missing The Point On Amazon's Margins [View article]
    You've got to be joking. Saying, that I don't understand the cloud. No that's simply not true. Go back and sit in front of a math class.

    I gave you a run rate projection of three different businesses with three different impacts on accounting near identical what Paulo said anyway. Whether I had said 90% or 100% gross margin would have been a negligible impact.

    Anyone with a strong enough of a background in accounting and math can figure this stuff out. I don't need to plaster 200 articles onto Seeking Alpha to make a point on what I do or don't know about financial accounting or financial statement metrics.

    While I respect Paulo. I don't think he arrived at the same conclusion as me. Too dependent on accounting. I get the accounting, I'm trying to figure out whether or not Amazon did or did not mark-up products.

    All roads lead to Amazon having in fact marked up on some products, and used the pre-tax cash to pay for expansion opportunities in its data-warehousing business aka virtual cloud, IaaS, AWS. Not every form of investment is done in the form of CAPEX, part of the investment is in human capital. In services COGS is labor hours, in retail COGS is the price at which a physical product is bought.
    Feb 19 02:28 PM | Likes Like |Link to Comment
  • Missing The Point On Amazon's Margins [View article]
    That's highly unlikely. As I had mentioned already, every service business has to recognize some form of cost for production, whether it be labor hours or the like. Because the bulk of Amazon's retail sales involve physical product, and services represent a small fraction, and factoring in current growth rates (key word, you're isolating the impact of the increase in one division, but exclude the rising impact of the other).

    What i showed was a system of equation throughout my article. It's easier to mark-up a product to drive a meaningful improvement in margin, than to expect service sales to drive all the improvement in margins.

    I paid close attention in accounting class mind you. And I already used the comps from other businesses. Even pure-cloud players have some form of COGS.

    Sure you could say that Amazon has a different system for "accounting." The only difference here, is I'm trying to find the real margin improvement, and not the one that was arrived at by using accounting that applies to a retailer to drive up gross margins for a cloud company.

    What my analysis concludes is that the services weren't the only reason gross margins went up. But at the same time, even with gross margin improvements, the remaining money gets spent on pre-tax operating expenses. With low net income. However Amazon avoids paying taxes due to depreciation credits, so it's able to continue to invest.
    Feb 19 02:20 PM | Likes Like |Link to Comment
  • Ignore The 3D Printing Naysayers For Now [View article]
    Yes, Organovo has a problem. Many believe that the technology of printing whole organs won't reach market until 2020-2030.
    Feb 19 02:13 PM | 1 Like Like |Link to Comment
  • Missing The Point On Amazon's Margins [View article]
    No Paulo that's extremely unlikely, as I have already calculated that with a gross margin at 90%, and AWS generating $15 billion, the impact is still negligible. The real gross margin improvement came from a combination of media, and product sales. 3P could be a part of it, but that's still related to its retail operation. 3P would need to scale much further to have any meaningful impact. So I stand by my original assessment.
    Feb 19 12:03 AM | 1 Like Like |Link to Comment
  • Missing The Point On Amazon's Margins [View article]
    I was talking about gross margins, not net profit margins. Two different things.
    Feb 18 10:39 PM | Likes Like |Link to Comment
  • Missing The Point On Amazon's Margins [View article]
    No, look very closely at what I have written. The numbers don't lie. The gross margin figure improved, because they increased the prices on physical goods. The gross margin impact from cloud is pretty negligible, and even with other services, still negligible. I'm fairly confident Amazon priced its products higher in order to cover operating costs, which still translates into zero net income.
    Feb 18 10:38 PM | Likes Like |Link to Comment
  • Missing The Point On Amazon's Margins [View article]
    To make a long term forecast on the value of the business, I may consider working out future operating margins, and net profit margins.
    Feb 18 09:00 PM | Likes Like |Link to Comment
  • Missing The Point On Amazon's Margins [View article]
    No, what I'm saying is that cloud in general is a high gross margin business. Many of the costs associated with a cloud services business is related to operating costs and not on cost of goods sold.
    Feb 18 08:59 PM | 4 Likes Like |Link to Comment
  • Twitter Share Unlock Could Cause A 20% Correction [View article]
    AH very good point Illuminati. I will consider that approach as well.
    Feb 17 07:28 PM | Likes Like |Link to Comment
  • Twitter Share Unlock Could Cause A 20% Correction [View article]
    Thank you for the support Albert. I hope to maintain clarity, investment focus, and objectiveness at all times. I will continue down this path, and see if I can pave a way for making Seeking Alpha one of the best destinations on technology analysis.
    Feb 17 07:27 PM | Likes Like |Link to Comment
  • Adobe May Trade At $133 Per Share By 2016 [View article]
    Well in any instance you create a web page.You want a professional program like Adobe Creative Suite to do all the heavy lifting when it comes to designing the page. I've seen a web programmer do it before, but I'd need to double check with him.But you basically design the website using Adobe, and then you program the web page with specific scripts.

    Taken to another level, it becomes more useful when it comes to designing applications for mobile and etc. Adobe is also used for movies, and the graphics for video games as well. I believe the versatility of the software is what makes it so valuable, and with the web becoming more graphics-centric, I see nothing that can damage its moat.

    Yes, I'm referring to software as a service, and while it's a slower growing category than IaaS, it still generates higher marginal revenue than a perpetual licensing model.
    Feb 17 05:30 PM | Likes Like |Link to Comment
  • Twitter Share Unlock Could Cause A 20% Correction [View article]
    Well, in the past I also said that Twitter was going to be a volatile investment that merited investment on long-term potential. I calculated the impact from the share unlock, and while it's true I'm cautious of the impact that it can have on the price of the stock. I'm still bullish on the fundamentals of the business.
    Feb 16 09:43 PM | Likes Like |Link to Comment
  • Adobe May Trade At $133 Per Share By 2016 [View article]
    Oh, that, no news? Yeah, it's because Adobe's outward growth potential is being priced into the value of the stock. Markets fluctuate a lot, but at the present moment, cloud is expected to grow exponentially, and computer programs dealing with computer graphics are well positioned for a digital future pertaining to the internet of things.

    The demand for graphics designers should trend higher as GUI, and graphics intensive applications have to be built out for various form factors. Plus digital consumption of media is expected to trend higher. Adobe sells the pick axe and shovels, for digital content creation.
    Feb 16 07:10 PM | Likes Like |Link to Comment
  • Microsoft's Future Is Cloudy And That Is A Good Thing [View article]
    Michael, great article, I guess we can both agree on Microsoft being a great investment.
    Feb 16 03:31 PM | Likes Like |Link to Comment
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