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More on Amazon: Q4 revenue guidance is below a $22.8B consensus. Q4 operating income (inc. stock...

More on Amazon: Q4 revenue guidance is below a $22.8B consensus. Q4 operating income (inc. stock compensation) expected to be anywhere from -$490M to +$310M vs. +$260M in year-ago period. North American revenue +33% Y/Y (includes web services), international only +20% (would be +27% if not for forex). Media sales +11%, other merchandise +36%. Headcount rose by 12.3K Q/Q to 81.4K, fulfillment expenses +36% Y/Y, technology/content expenses +55%. AMZN now -2.7% AH. (PR)
Comments (10)
  • The SEC really ought to go and look at who bought the last 2 earnings reports.

     

    Anyway, it doesn't much matter. AMZN's fundamentals continue to go down the drain.
    25 Oct 2012, 04:34 PM Reply Like
  • I have told you before Paulo, the cartel has set up the game to go after the shorts. The only new money coming into the AMZN pool is short money, whether it be during negative announcements about tax collection or during AMZN earnings announcements.

     

    The shorts wade in, expose their bank accounts to the HFT cartel, who proceed to take advantage of the shorts. No new net buying is occurring. Just trading between HFT machines, who seem to have figured out a method to buy and cancel between themselves.
    25 Oct 2012, 05:01 PM Reply Like
  • There are very few AMZN shorts now. Very low short interest (given the valuation and fundamental implosion).
    25 Oct 2012, 05:02 PM Reply Like
  • But there are new shorts after the announcement. Who do you think is selling AMZN down to 205 on the bad print? New shorts.

     

    The machines then lineup and buy and cancel between themselves, forcing the new shorts to cover, and taking new money into the AMZN pool. The game has been going on for over 2 years. Net longs have not increased their exposure. Just temporary shorts getting roasted over and over again.
    25 Oct 2012, 05:05 PM Reply Like
  • Other than the "all-in" cartel, the only marginal buyers might just be the auto-pilot cap weighted index and closet index funds. In spite of the general levitation of both AMZN and the market of late, which means the index funds would have been adding more AMZN shares, there has been some lightening up of net institutional holdings (which would include the index fund holdings) in the delayed snapshot I have been monitoring.. . by about 900K (out of 300 million) over the past two months. Mere drop in the bucket, but nonetheless interesting as this is in spite of the index funds who would have been adding during this period.

     

    Only circumstance I can see the Cartel's resolve getting tested would be a general market dislocation when disgorgement by index funds and redemptions by investors in the cartel's funds would meet an air pocket and it would be a long fall before vulture and hedge fund investors would step in to support this stock. The size of the short interest has been at a fairly small and steady level suggesting those still left standing are "conviction shorts" who are not likely to step in to buy and cover until a much, much, lower level.

     

    Until then the trading sardine will continue to be tossed back and forth and kept aloft to the bewilderment of those seeking a rational justification for its performance.
    25 Oct 2012, 06:59 PM Reply Like
  • I believe AMZN will rally tomorrow, in spite of an awful fundamental report, simply because it is already oversold, and the market trapped new short term shorts in the AH scam.

     

    All of the technical indicators I look at are oversold. Not to say they can't go even more, but AMZN is both a cartel controlled stock and the poster child for the post bubble Bernanke economy.

     

    But, I also firmly believe that distribution has begun. The cartel simply can't perpetrate the scam forever, if for no other reason than their antics are being noticed even by the clueless longs.

     

    Soros getting out last year was the first shot across the bow, and I believe your holdings data may be the second, albeit small flows for now.

     

    Third, AMZN has really been the buyer of their own stock for the last two years, along with the cartel HFT machines, and they have been financing this stock buying through their own cash flow. Even AMZN now admits that their cash flow is negative, and likely to get worse in the coming quarters. Less cash, less stock buying. Maybe even a forced debt offering coming in the next 4 quarters.

     

    Finally, the biggest driver of AMZN's valuation and the HFT cartel scam has been the FED easy money policy, near infinite money printing, handed mostly to the cartel controlled banks (GS and others). While the FED is still printing an excess 40 billion a month, I believe the market is just now pricing in a Romney victory.

     

    While this may have some economic impact at the margin, a Romney victory is certain to end the reign of Bernanke. Probably by this December. The markets are not pricing in that, but are just beginning to. No more Bernanke, much less easy money. Maybe the end of QE Forever. And that is a huge blow not just to AMZN, but all stocks, AAPL included.

     

    Conclusion: AMZN rallies a bit tomorrow and maybe even up to 240 over the next few days. Then more selling. And this time, in larger chunks.
    25 Oct 2012, 08:59 PM Reply Like
  • Paulo -

     

    I just checked the 4th quarter per share earnings estimates and the average was 52 cents a share. The high estimate was 94 cents and the low estimate was a 16 cent loss. 39 analysts contributed.

     

    With today's 4th quarter earnings guidance of -$490M to +$310M, the per share estimates obviously will come down.

     

    Any guess what the new average will be?

     

    Thanx for all the good work.

     

    M
    25 Oct 2012, 10:09 PM Reply Like
  • $0.15 to $0.25, I think. That's if analyst don't start lowballing heavily to favor AMZN. The reports should read like fiction.
    25 Oct 2012, 10:34 PM Reply Like
  • "But, I also firmly believe that distribution has begun. The cartel simply can't perpetrate the scam forever, if for no other reason than their antics are being noticed even by the clueless longs."

     

    That's what I noticed too. From 260 down to 220. Before the last earnings report. Let's see if they can pump AMZN up to 240. But how would they rationalize it? That AMZN is expected to LOSE more money selling more stuff online?
    26 Oct 2012, 01:24 AM Reply Like
  • Smoke and Mirrors, Amazon just doesn't have the cash.

     

    http://bit.ly/RKVIqU
    25 Oct 2012, 05:03 PM Reply Like
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