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Timothy Phillips  

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  • 1 More Reason To Hate Amazon's Valuation [View article]
    Yes, Michael, Amazon is playing with funny money, and as long as it costs less for the big funds (Capital Mgt, Fido, etc..) to push up the price than they make on their existing shares, they will continue to do it. Very low volume allows for the easy HFT and big fund manipulation.

    So, I would not recommend a short that cannot remain in for more than a year, but I would recommending selling to anyone who is long and in the money. Risk is too large for a collapse (once a big fund does start to sell due to low volume) to not take profits.
    Jul 2, 2013. 01:52 PM | 1 Like Like |Link to Comment
  • 1 More Reason To Hate Amazon's Valuation [View article]
    diggoman - AWS is less than 4% of revenues. I discussed the profitability of this in a prior article (http://seekingalpha.co...)

    Place any multiple you want on ~$2B in AWS revs, and the rest of the company valuation still does not make any sense by a mile.
    Jul 2, 2013. 01:38 PM | 7 Likes Like |Link to Comment
  • Amazon.com Q2 2013 Earnings Preview [View article]
    Amazon is now the 24th most valuable company in the S&P500 with essential zero retained earnings and cumulative cash flow.

    They trade at over 14x Book value, 194x forecatsed 2013 Cash Flow, and 171x forecasted 2013 EBIT. What a value.
    Jul 2, 2013. 12:55 PM | Likes Like |Link to Comment
  • Amazon.com Q2 2013 Earnings Preview [View article]
    Harry - why is $300 the magic number? Why not $500, or $1000 .. it is all funny money at this point with no connection to reality or the company at all.
    Jul 2, 2013. 12:49 PM | Likes Like |Link to Comment
  • Amazon.com Q2 2013 Earnings Preview [View article]
    Earnings amount will be irrelevant this Q, unless they blow it out with massive operating margin upside that is proven sustainable. The key will be to watch the cash flow statement this quarter.

    At some point the expansion in days payable, accrued expenses and unearned revenue (+ contraction in days sales outstanding) must end. They are already at unsustainable levels if they want to maintain any relationships with suppliers/3P vs. comp going forward.

    Once they flatten, or even recede, AMZN cash flow will turn quickly, and they will have a capital crunch. I don't think the terms will be as favorable the 2nd time around on debt, so a secondary equity offering will be required. Based on the low daily volume, this will be a major issue.
    Jun 26, 2013. 07:48 AM | Likes Like |Link to Comment
  • Amazon Fresh: One Guaranteed Winner, But Many Potential Losers [View article]
    MI - your argument is the monopoly one - that AMZN will get so big that they can successfully change their business model from lowest price to higher price and customers will either have to accept it (because there are no alternatives) or will gladly accept it (because they love AMZN and will be happy to pay more).

    I don't buy this argument for 3 reasons:
    (1) 29% of Americans (and less in other countries) don't have a credit card - B&M will always be their shopping location.

    (2) There is always an alternative and innovation - they will not be able to raise prices (name a business that has done this successfully?). They have already scaled to $70B in sales without any economies of scale .. how much bigger do they have to get to see some profit? Growth is already slowing precipitously showing you the business is in maturation stage w/o any sign of profit.

    (3) E-commerce retail has generated an entire generation of new shoppers that price check everything on mobile. This will driver higher competition and force lower pricing going forward than at any time in the past. AMZN has created a new monster with their own tools that will be used against them from upstarts and existing players that catch on ... I feel that profits will get squeezed for AMZN going forward in retail (and why they spent so much to expand into 3P, digital and the cloud).

    I think the most telling proof of this is the average spend per customer. It has now shown its first declines in AMZN history the last 2 Q's. They cannot maintain their high growth with spend/customer decreasing. Check my article on this to see the data: http://seekingalpha.co...
    Jun 14, 2013. 08:33 AM | 3 Likes Like |Link to Comment
  • Amazon Fresh: One Guaranteed Winner, But Many Potential Losers [View article]
    Low income people/families also live paycheck to paycheck (or welfare pmt) and do not have $299 at any one point to dole out.

    Amazon Fresh will only work for upper middle income families (not the rich as they already have a solution for this), and the not the low income or lower middle as they don;t have the upfront cash or credit.
    Jun 14, 2013. 08:14 AM | 2 Likes Like |Link to Comment
  • Amazon Fresh: One Guaranteed Winner, But Many Potential Losers [View article]
    MI - Walmart customers don't go to AMZN becuase most of them do not have credit cards. 29% of amercians currently do not have a credit card.
    Jun 14, 2013. 08:12 AM | 1 Like Like |Link to Comment
  • ChannelAdvisor Data Springs Large Negative Surprise For Amazon.com [View article]
    Mike,

    Internet retail will remain and grow faster than overall retail for a while. It is just too damn convenient for a large segment of the population. But with an amazing 30% of Americans w/o credit cards (and much larger %'s in growth markets), B&M will be around as well (so there will be no monopoly for AMZN as longs claim)

    So, the question is not will e-commerce retail be there, but what will it look like? My analysis has shown that e-commerce with scale(that ships) must be less profitable than B&M (due to shipping, fulfillment, ease of price matching, etc..). That is nearly indisputable based on the facts. Therefore valuations will come down to lower than B&M as growth in the segment slows (law of large numbers - overall retail only grows at population growth +/-).

    Now niche e-commerce retail (that focuses on customer value from the delivery) should be able to deliver higher margins than broadline B&M, but they will not be able to scale.

    So, WMT gets 0.5x P/S on 4.5% net margin & 5% growth ... expect AMZN's 1P retail business to get much less than that once growth moves from 18% to less than 10% (coming soon).
    Jun 13, 2013. 02:55 PM | Likes Like |Link to Comment
  • Amazon Fresh: One Guaranteed Winner, But Many Potential Losers [View article]
    You're definition of success is ridiculous: "If Amazon can break even with Amazon Fresh, the company will succeed. No ifs, ands, or buts about it."

    You're point is that if they can break even on Fresh (which is a huge assumption on your part .. prove it), they enable more bundling through Prime and increase retail sales. So, let me get this straight - you want to them breakeven on Fresh so they can lose more than already do on retail? Oh, I get it, make up the loses on volume ...

    At some point, AMZN needs to focus on what it already has and turn it profitable - how about they prove that before they continue to distract themselves with new money losers. Any business that needs another unrelated business to turn itself profitable, is not a business at all.
    Jun 13, 2013. 02:39 PM | 11 Likes Like |Link to Comment
  • ChannelAdvisor Data Springs Large Negative Surprise For Amazon.com [View article]
    Yes, Tippydog's commnets were spot on.

    AOL comparison is a bit of stretch because there main issue was not comfort with the internet, but the deployment of the wrong technology and then they could adjust fast enough (phone modem dial-up access vs. what the cable providers could do through coax).
    Jun 13, 2013. 11:19 AM | 1 Like Like |Link to Comment
  • ChannelAdvisor Data Springs Large Negative Surprise For Amazon.com [View article]
    $265 is about the 50 day SMA, that is why you see the resistance there. I think it will find that point again soon, and then we will see if that is enough for someone to bail and crash through it. AMZN typically has a hard time breaking through this point - only 3 times out of 11 attempts in the past year (27% breach success)
    Jun 13, 2013. 11:15 AM | Likes Like |Link to Comment
  • ChannelAdvisor Data Springs Large Negative Surprise For Amazon.com [View article]
    That is true, but the business has changed dramtically since then, and my articles point to how those margins are now impossible based on the current structure of the business (they can't dial back the costs w/o destroying all growth).

    Eventually, analysts/investors are going to realize that "next year" is never coming, and Amazon is in a new norm.
    Jun 11, 2013. 06:30 PM | 1 Like Like |Link to Comment
  • ChannelAdvisor Data Springs Large Negative Surprise For Amazon.com [View article]
    Illuminati - AMZN already earns less and generates less cash than Facebook.

    FB is on track to earn over $1.2B this year (real earnings including stock cost) vs. about $400M for AMZN (if they are lucky - they never hit forecasts).

    Next year, Analysts have FB earnings higher than AMZN again (and 2014 is supposed to be the harvest year for AMZN).. More $2B for FB, and about $1.5B for AMZN.
    Jun 11, 2013. 03:39 PM | Likes Like |Link to Comment
  • Why Amazon's Expansion Knows No Bounds [View article]
    Yes, that is one high-end program. There is no one who shops at Walmart, Costco, BJ's, or Sam's that would front that type of cash. It could work in some sections of LA and SF, but it will be niche ....
    Jun 11, 2013. 07:30 AM | 1 Like Like |Link to Comment
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