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James Sands

 
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  • Twitter's Valuation Does Not Make Sense [View article]
    Valuation for Twitter is hard to fathom. I bought in at $32 just above the most recent bottom. However, I'll hold for the next few years to see how it develops.
    Aug 29 06:59 PM | Likes Like |Link to Comment
  • Wal-Mart Takes A Page From Amazon's Playbook [View article]
    How are their necks on the line???? It's not their money dude.

    And if everyone joins the same party, no one gets hurt.....

    It all plays out fine until a recession hits, then the game falls apart...or more like its a hot potato drill...

    There's no substance to who owns what, especially when there is a discrepancy between information (the name of the game)...
    Aug 29 06:55 PM | Likes Like |Link to Comment
  • Wal-Mart Takes A Page From Amazon's Playbook [View article]
    I agree with you Gary, just not on Amazon. Long Apple, looking to enter on Google, sold Amazon this year.
    Aug 29 05:41 PM | Likes Like |Link to Comment
  • Wal-Mart Takes A Page From Amazon's Playbook [View article]
    Gary,

    A bit of a hyperbole. Not an apples to apples comparison. It is common knowledge that Walmart's e-commerce business is growing faster than Amazon's.
    Aug 29 02:05 PM | 3 Likes Like |Link to Comment
  • Rocket Fuel rallies following Criteo acquisition report [View news story]
    Why???? Clearly Rocket Fuel is inferior to Criteo....
    Aug 29 11:51 AM | Likes Like |Link to Comment
  • The Majority Of Amazon's Acquisitions And Strategies Centered Around Prime [View article]
    True, we had prime for a regular trial, I believe 1 month and stopped using it. We subscribe to Netflix and Hulu, Prime was inferior to both, and somewhat redundant to Netflix.

    The commoditization comment is sticking with me too. I think it is often overused. It would appear that retail whether physical or e-commerce, tends to have a certain scale from an individual company basis. I don't believe that there are many, if any shoppers, who would solely use one entity for all their purchases, let alone a majority.

    Human nature tends to get fatigued and become more critical as "loyalty" of a company continues for years and decades. For these reasons, retailers must fight to compete over the long-term.

    I believe that Amazon has hit a general peak for its e-commerce business and now is going to be in a dog fight from here out. Costco is growing 6-8 percent y/y and many grocery store chains are always packed. The grocery delivery model may be one of the few that can never be cracked by e-commerce. Owning private vehicles will most likely need to fundamentally change for many physical-based habits to be required to adjust.

    Plus local grocery store chains already have delivery services, I think that they have been around for quite a long time, even in the 50s. The independence created by owning a vehicle is what prohibits inclination of such a service.

    I realize Prime is valuable to those who use Amazon frequently, but is definitely a turn-off for those of us who like the option to use Amazon, but see clearly the attempt to dictate where one spends most of their discretionary budget. No thanks.
    Aug 29 11:48 AM | 1 Like Like |Link to Comment
  • The Majority Of Amazon's Acquisitions And Strategies Centered Around Prime [View article]
    I agree that Prime is fundamental to the business. I disagree that the other strategies outside of the core e-commerce business will be successful. Amazon is having a hard time with e-commerce competition which is the primary driver to look elsewhere for revenue growth.

    A lot of risk down the line for this company. Media is not going to necessarily stay fixed in today's streaming platform either.
    Aug 29 11:30 AM | 1 Like Like |Link to Comment
  • Alibaba releases Q2 results; Yahoo up slightly [View news story]
    Pete,

    I was responding to the comment that JD is so much smaller and the "needle" moves quicker. There is a strong lack of knowledge regarding the e-commerce industry in China and how this breaks down between Alibaba, JD, Vipshop, and Dangdang especially with respect to how growth is tracking.

    From a revenue perspective, all of these companies are competing against one another. Alibaba's only lead is their B2B focus. On the consumer side, competition will continue to be fierce.

    I own JD and have really thought about Alibaba. I am not a fan of Jack Ma and not necessarily a fan of Alibaba's recent spending binge and schizophrenic purchases before they raise cash.

    Alibaba's focus is not where it should be, similar to Amazon these days, and I'm uncertain how this will impact long-term goals. Plus if a company's vision changes because of events, then this also presents further risk. I think both Jack Ma and Jeff Bezos for that matter are at tipping points of delusional thinking.

    The profit margin is obviously better than JD, but JD is actually investing in infrastructure on multiple fronts for warehousing, distribution, and delivery. This presents a very unique opportunity and I think is a smart move for the long-term development of e-commerce in China.

    This point of infrastructure investment is critical because Alibaba claims they will invest $20 billion through 2020. What will they invest in if JD is taking the lead.....JD by default may become a very important part of multiple facets of e-commerce in China, creating a stronghold where Alibaba may eventually become dependent on JD's infrastructure. I personally think JD has better management for supply chain and e-commerce developments.

    I expect that JD will not be profitable for the next year or two, but that they will grow their free cash flow over this time and eventually get to a 1-2% profit margin within 5 years. Long-term it will remain to be seen if this margin is capable of being pushed any higher to the 3-4% level.

    If the company continues to grow at a rapid pace (they are hitting 65% y/y consistently now over the previous 4 quarters in a row), they will approach $100 billion over the next decade. For an e-commerce company $2-4 billion in net income is not bad at all.

    From a valuation perspective, if the company were able to get to this level, it would be trading around 10xs earnings today. It is understood that these are all ifs, but the same can be said for any company long-term.

    Regardless, I suspect that JD will outperform Alibaba on the revenue side long-term. Both companies are valued fairly well based on these contradictions. Alibaba will have a market cap near the $150-200 billion range, JD is near $40 billion. JD's revenues will be much higher than Alibaba, but profits will be less long-term. For patient investors, JD will grow north of $100 billion market cap.
    Aug 28 11:44 AM | Likes Like |Link to Comment
  • Alibaba releases Q2 results; Yahoo up slightly [View news story]
    Thanks for the replies bobcat, we can agree that the Alibaba IPO will be interesting with its impacts not only on Yahoo, but the market in general. Could actually be a top to a correction soon after.
    Aug 27 05:58 PM | Likes Like |Link to Comment
  • Alibaba releases Q2 results; Yahoo up slightly [View news story]
    Yahoo is struggling, so with a ton of cash dividend will be inevitable because this cash will be in Yahoo's coffers and not shareholders, with no growth other than equity, if kept in Alibaba long-term, investors will become more frustrated.
    Aug 27 05:57 PM | Likes Like |Link to Comment
  • Alibaba releases Q2 results; Yahoo up slightly [View news story]
    JD's net revenues are actually much larger than Alibaba's. This is why it is relevant. Each time Alibaba's GMV moves higher and revenue decelerates, the "large room for growth" thesis gets less appealing.

    Remember, Alibaba does not have as high of a net revenue margin relative to their GMV as companies like eBay and Amazon do....thus if we only focus on GMV we miss the real growth relationship to net revenue and ultimately profits.
    Aug 27 05:53 PM | Likes Like |Link to Comment
  • Alibaba releases Q2 results; Yahoo up slightly [View news story]
    Alibaba has 11 Main as its first foray into the U.S. I think that Yahoo shareholders are very hopeful that they get a buyout. If the business is strong, the opposite should be true.

    All anyone talks about regarding Yahoo is Alibaba. Underneath all of this with 2+ years of Mayer at the helm is a beating from Google, Facebook, and Twitter on the ad and mobile front.

    Twitter is becoming a primary news source and if they get it right they will continue to eat Yahoo's lunch which is quite ironic since Yahoo's news information is arguably the company's bread and butter. Yahoo's innovation is questionable, Tumblr is getting close to a year and half and soon will be two years old with Yahoo, not much of impact so far.

    By contrast, Facebook turned things around quite dramatically in a similar time period and Twitter's growth is continuing robustly and will possibly surpass Yahoo over the next 3 years. Google is Google and is the only company in history to generate over $50 billion in advertising revenue.

    I would not have confidence for a second if Yahoo had $30 billion cash that they would have any ability to generate more growth. On the other hand, if they pay out a dividend (which they will) this makes them a better investment as a slow-growth dividend-based investment. Returning real money to shareholders should be a priority and a reward for holding Yahoo as an Internet laggard.

    This may seem harsh for a shareholder, but until Yahoo proves otherwise, I don't see a catalyst for strong stock appreciation based on the fundamental operation. The price already has Alibaba baked in for the most part as of today. There is some short-term upside potential with Alibaba's actual IPO day, other than that not much else.
    Aug 27 03:31 PM | 3 Likes Like |Link to Comment
  • Alibaba releases Q2 results; Yahoo up slightly [View news story]
    JD continues to outpace Alibaba from a net revenue growth perspective. The company's revenue growth has been at 65% or higher the previous four quarters in a row on a year-over-year basis.

    Comparatively the last two for Alibaba have been at 39% and 45%. Something to keep watch on.....
    Aug 27 12:22 PM | Likes Like |Link to Comment
  • Alibaba releases Q2 results; Yahoo up slightly [View news story]
    Based on trends, it appears Alibaba is taking stakes in companies and not buying many outright.

    Again, if we look at Yahoo's core business, revenue is still declining, what value is this for Alibaba?
    Aug 27 12:18 PM | Likes Like |Link to Comment
  • WSJ: Kleiner Perkins investing in Snapchat at ~$10B valuation [View news story]
    They don't have any monetization yet and are 500 million behind WhatsApp in users; so far it would appear that Facebook went with the a company that will have a better near-term opportunity based on scale.

    If we learn anything from social media, it is that scale of users seems to be paramount as Facebook dominates mobile second only to Google. Twitter is sort of an anomaly.

    Additionally, it would be nice to know the growth rate for Snapchat users.

    Similar to ad-tech in general, I don't see many of these companies being winners long-term. But a few may survive and others will continue to get acquired.
    Aug 27 11:21 AM | Likes Like |Link to Comment
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