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jhoyer27
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I am an MBA student heavily interested in financial activities. In my offtime I troll the investing blogs looking for patterns to follow, trying to piece together a moderate understanding of what's going on before I enroll in the CFA program. I am definitely open to pointers and hints, so feel... More
  • $14.99 For An E-Book??? 0 comments
    Apr 12, 2012 1:48 PM | about stocks: BKS, AMZN, AAPL, BAMM, NWS

    As it stands currently, Apple (AAPL), Amazon (AMZN), Barnes & Noble (BKS) and all other e-book retailers are contractually obligated to sell e-books at prices specifically chosen by the publishers who supply them. Currently, The only books e-book retailers like Amazon can "competitively" price are their own private label books. This lawsuit is trying to dissolve these contractual obligations, which would then allow the giants with deep pockets to bully everyone else out of the market with negative-margin pricing. I personally think that this "collusion" that is currently active is actually preserving what competition is left. I would hate to think about what the e-book world will look like several years down the road when a single company has most, if not all of the market share in e-books and can set whatever price they want. Because if the court rules in favor of dissolving these contracts, that's exactly what Amazon will be aiming for. Why take noticeable losses on millions of e-books you sell when there's no one left to compete against? Sure, in the short run, this development is going to be great for consumers, because they get to enjoy a temporary dip in their reading expenses. But you think $14.99 is a bad e-book price now? Wait till you see it a few years after these contracts are dissolved...

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: BKS, AMZN, AAPL, BAMM, NWS
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