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All-in? Amazon (AMZN) CEO Jeff Bezos confirms that its expanding network of warehouses across...

All-in? Amazon (AMZN) CEO Jeff Bezos confirms that its expanding network of warehouses across the U.S. will help reduce delivery times for online shoppers - potentially to the point that same-day delivery will be an option in some markets. It's a move that analysts say could either make the company the dominant retailer for decades or keep it mired with low profits due to the high costs of investing in the new warehouses.
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Comments (20)
  • Akimbe
    , contributor
    Comments (60) | Send Message
     
    If he has that many warehouses, how is AMZN any different than Bricks & Mortar -- apart from the extra shipping costs?
    12 Sep 2012, 07:40 AM Reply Like
  • Gloube
    , contributor
    Comments (104) | Send Message
     
    It doesn't have shops and all the related costs and capex?
    12 Sep 2012, 11:17 AM Reply Like
  • Paulo Santos
    , contributor
    Comments (20459) | Send Message
     
    Well B&M retailers don't go around saying "our profits suck because of our stores' capex", the way AMZN does ...
    12 Sep 2012, 03:43 PM Reply Like
  • HowardLax11
    , contributor
    Comments (8) | Send Message
     
    I'm not an Amazon shareholder or fan, but think about it this way. How many Best Buy stores are there in the Chicago area? Probably 10. If Amazon can serve Chicago with 1 or maybe 2 warehouses then they still have an advantage.

     

    On the contrary the more warehouses they have the inventory they have to manage and local demand trends they have to track.

     

    Maybe I'll go look at Best Buy's fixed assets and compare them to Amazon.
    12 Sep 2012, 05:20 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (20459) | Send Message
     
    BBY has more fixed assets (some hidden in operating leases, like AMZN). But then again, BBY has its customers doing the picking, packing and delivery, whereas AMZN has to pay for that.
    13 Sep 2012, 10:05 AM Reply Like
  • Gloube
    , contributor
    Comments (104) | Send Message
     
    Paulo santos, are you saying that having 1,000 stores is more cost efficient and less capex intensive than having 20 warehouses to cover the same area? Are you for real?
    14 Sep 2012, 09:37 AM Reply Like
  • Paulo Santos
    , contributor
    Comments (20459) | Send Message
     
    No - I'm saying that it's not obvious whether it's more efficient or not, because you have a host of costs with those 20 warehouses that don't exist with the 1000 stores, even if the 1000 stores imply more invesment.

     

    And besides, even while the stores imply more investment, never did you have WMT saying "our earnings such because of us investing". That ought to make you think.
    14 Sep 2012, 09:48 AM Reply Like
  • gensearch2
    , contributor
    Comments (1467) | Send Message
     
    AMZN doesn't need profits.
    12 Sep 2012, 07:40 AM Reply Like
  • Tae Kim 75
    , contributor
    Comments (183) | Send Message
     
    Amazon said on last conference call same-day delivery is not economically feasible for them for the most part.
    12 Sep 2012, 07:43 AM Reply Like
  • 215304
    , contributor
    Comments (651) | Send Message
     
    The market has given Amazon a permanent bye on profits. Profits are necessary for all other companies traded in the stock market. Amazon, on the other hand, only has to raise revenues. Instead of P/E, a new metric, P/R (price to revenue) is used for Amazon exclusively. It's certainly a pretty good deal they have. I'm not sure how they got this deal, but it appears to be working pretty good for them.
    12 Sep 2012, 10:53 AM Reply Like
  • mitrado
    , contributor
    Comments (2003) | Send Message
     
    What about LinkedIn, 215304? It has an insane P/E!
    I thought LNKD was too expensive with a P/E of 600, but now its P/E is only 1023! Dementia?
    12 Sep 2012, 01:00 PM Reply Like
  • Paulo Santos
    , contributor
    Comments (20459) | Send Message
     
    LNKD at least has earnings which grow, so at some point it might grow into it.
    12 Sep 2012, 03:44 PM Reply Like
  • 215304
    , contributor
    Comments (651) | Send Message
     
    mitrado, I agree Linkedin has an insane P/E. But Linkedin is not a large cap company; it's a start up. Amazon is a large cap company, currently the 23rd largest company by market cap in the US. Large cap companies are expected to grow revenue and earnings. The median P/E of the top 50 US companies is about 16. Amazon is 2000% higher.
    13 Sep 2012, 10:12 AM Reply Like
  • Paulo Santos
    , contributor
    Comments (20459) | Send Message
     
    215304, and the amazing things is that AMZN is probably on the bottom 5% of those 50 large caps, when it comes to earnings growth.
    13 Sep 2012, 10:17 AM Reply Like
  • Ray Lopez
    , contributor
    Comments (1530) | Send Message
     
    Remember the officers and insiders of a public corporation only own a small percentage of the company. What share of the common does Besos still own? Certainly not 50% and possibly not even 5% anymore. But his reputation is on the line, and like John Chambers of Cisco does have some skin in the game, though both of them more or less have CEO jobs for life.
    12 Sep 2012, 01:34 PM Reply Like
  • Peter Larson
    , contributor
    Comments (632) | Send Message
     
    19%

     

    Bezos owns 19% of Amazon.
    12 Sep 2012, 01:54 PM Reply Like
  • krk
    , contributor
    Comments (826) | Send Message
     
    Yes. Bezos about 88 million.
    Institutionals: about 300 million
    And the rest,about 60 or so million by everybody else.
    The hoi polloi owns less than Bezos alone.
    And the shorts are a mere 8 million, far from their peak level around 23 million in 2009 when shares outstanding were 20+million lower.

     

    That probably explains how the cartel can levitate this stock rationalized by constantly shifting metrics and pie-in-the-storylines.
    12 Sep 2012, 03:47 PM Reply Like
  • Whitehawk
    , contributor
    Comments (3129) | Send Message
     
    But "free over $25 delivery" will probably still take a snail's pace of 10 days, not even cross-country. Would be interesting to know what % orders choose this option. (Does anyone know?)
    12 Sep 2012, 03:11 PM Reply Like
  • gensearch2
    , contributor
    Comments (1467) | Send Message
     
    It's not Jeff Bezos' style to give out too many numbers ...

     

    Amazon Prime celebrates an amazingly vague milestone

     

    August 27, 2012

     

    It’s interesting how often a company as numbers-driven as Amazon.com asks its customers and shareholders to judge its progress with incomplete data.

     

    The tradition continued this morning as the company announced a big milestone for its Amazon Prime subscription service, complete with a letter from CEO Jeff Bezos on the Amazon.com home page: Amazon now ships more items through the Prime Free Two-Day Shipping program than it does through the Free Super Saver Shipping program that can be used by all of its customers for orders totaling more than $25.

     

    It sounds like a watershed moment, and that very well could be the case, but it’s also a classic Amazon announcement — comparing one unspecified number to another unspecified number and hoping everyone will be satisfied and impressed.

     

    In this case, the real question is how many Amazon Prime subscribers there are, but that’s a number that Amazon doesn’t make public. Bezos says in his home-page letter that “millions” of people are Amazon Prime members, but that’s as specific as the company is getting. Earlier this year, Bloomberg News cited three sources who said Amazon Prime had 3 million to 5 million members as of October 2011 — less than than half as many subscribers as Wall Street analysts had been estimating. ...

     

    http://bit.ly/TX77Gu
    13 Sep 2012, 09:08 AM Reply Like
  • BigJ1260
    , contributor
    Comments (206) | Send Message
     
    extremely dangerous to even consider shorting AMZN given irreconcilable performance of stock price vs fundamentals and even forward earnings. Analysis on the near term has proved almost meaningless.

     

    One of every 8 customers is in California - revenue this qtr due to sales tax charging beginning tomorrow in CA. will have revenues thru the roof this qtr. - then Xmas qtr will show growth as it always does. Chickens may come home to roost in Calendar Q1 2013 when more states have tax in place and organic growth may be only in low teens.

     

    Then the whole growth means and justifies no profit absurd, particularly when Apple probably grows near 30-40% still in Q1.

     

    The whole excuse of bulls that no profit is bcus of short term WH Capex is really dumb - these are LT Capex expenditures on LT (10-20 years) leases and amortized build out costs and are not going away any time soon.

     

    Stock price and multiple is a joke - but the punchline is on you if you try to short near term. Wait for the fantasy to begin to dissolve first
    14 Sep 2012, 02:53 PM Reply Like
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