Amazon's Margin Myth: Sleight Of Hand
Paulo Santos • 108 Comments
Paulo Santos • 108 Comments
Amazon's Margin Myth: Sleight Of Hand
Paulo Santos • 108 Comments
Paulo Santos • 108 Comments
Thu, Mar. 17, 9:01 AM
- There's buzz in the office supply sector after the New York Post reports that Amazon (NASDAQ:AMZN) may make an offer for the corporate business unit of Office Depot (NASDAQ:ODP). The e-commerce giant is seen using the ODP corporate accounts to jump-start its new office supply business.
- A deal to offload the business would clear a path for the merger between Office Depot and Staples (NASDAQ:SPLS).
- Sources tell the Post that an activist investor with a significant stake in ODP is pushing for the transaction.
- Office Depot is up 7.79% premarket to $5.67. Staples is 1.86% higher at $9.87. AMZN is tilting lower, down 0.66% to $570.50.
Wed, Feb. 24, 3:56 PM
- With Viacom (VIA +1%, VIAB +0.3%) looking to sell a strategic stake in Paramount Pictures, who could be interested in buying?
- Foreign investors are likely, amid a wave of investment in Hollywood from overseas. China's Perfect World is putting $250M into a development slate at Universal, while in-country counterpart Bona Film Group said in November it was putting $235M into a slate at Fox.
- Analysts suggest the studio is worth about $5.5B today, notes The Hollywood Reporter, so a minority stake could still come to $2B. Viacom paid $9.8B for the studio a dozen years back.
- Major conglomerates like Alibaba (BABA +0.6%), Dalian Wanda and Fosun (OTCPK:FOSUF) have an appetite for Hollywood deals -- and Wanda already owns cinema chain AMC and producer Legendary Entertainment, while exploring a stake in Lions Gate. A key interest with those firms is ability to get Paramount products into China, where Transformers is a major phenomenon. Tencent (OTCPK:TCEHY +0.2%) has similar international media appetites.
- Fosun is trying to buy Bona and take it private, which would give it Bona's entry into Fox's slate.
- Back home, Lions Gate (LGF +8.8%) is now a frequent source of tie-up rumors -- and is on the move today amid Amazon.com (AMZN +0.1%) content-deal chatter. Both Lions Gate and Amazon could use a piece of Paramount for different reasons.
- Meanwhile, Apple (AAPL +1.5%) has been floated as a possible bidder for Time Warner, as it may be shopping for content to feed TV dreams -- but a stake in Paramount would come far cheaper than trying to swallow Time Warner whole for $50B-$80B.
- Previously: Viacom, up 5%, confirms Paramount investment feelers (Feb. 23 2016)
Tue, Feb. 16, 1:06 PM
- Amazon (AMZN +2.2%) is acquiring Emvantage, an Indian provider of online/mobile payment services, for an undisclosed sum. As one would expect, Amazon plans to use Emvantage to deliver payment solutions for the Indian e-commerce market.
- Amazon has been investing heavily to grow its Indian presence and better compete against local giants Flipkart and Snapdeal, as it tries to grab more of an e-commerce market whose penetration rates remain well below China's. Alibaba has invested in both Snapdeal and Indian online payments/e-commerce firm Paytm.
- Meanwhile, via AWS, Amazon is acquiring NICE Software, an Italian provider of software for managing/accessing high-performance computing (HPC) server grids and remotely accessing 2D/3D graphics apps hosted on cloud servers. Terms for this deal are also undisclosed.
- Amazon promises to continue supporting NICE's existing products, and to also work with the company to "create even better tools and services." Last year, AWS launched new instances (called C4) for its EC2 cloud computing service that are optimized for performance-intensive workloads.
Mon, Jan. 11, 1:36 PM
- The Seattle Times reports Amazon (AMZN -0.5%) is expected to acquire the 75% of French delivery/logistics firm Colis Privé it doesn't own in Q1. No word on deal terms; Amazon bought 25% of Colis Privé in 2014.
- The report comes less than a month after ones stating Amazon is in talks to lease or buy 20 Boeing 767 jets to deliver goods for its fulfillment infrastructure. The company has already bought thousands of truck trailers.
- Baird's Colin Sebastian (Outperform rating) sees a Colis Privé purchase bringing Amazon one step closer to having an end-to-end logistics infrastructure for both its own goods and third-party goods, and sees the efforts yielding both efficiency gains and improving the customer experience. Others also see Amazon going in this direction, at least with regards to specific goods and regions.
- Separately, the WSJ reports Amazon is expected to launch a smaller, cheaper, and more portable version of its Echo speaker/voice assistant in the coming weeks. The current Echo, first announced in Nov. 2014, sells for $180 and needs to be connected to a power outlet. It has a rating of 4.5/5 stars on Amazon's site.
Sep. 5, 2015, 11:15 AM
- A seller's market for well-known apparel brands has emerged amid a retail scene influenced heavily by the rise of e-commerce and difficulty in launching startups at scale, observes Women's Wear Daily.
- Global F/X pressure and the cost of maintaining stores has tripped up many apparel sellers that are still in favor with consumers. Those searching for a buyer have found the M&A math tipped in their favor due to the smaller pool of sellers of attractive brands.
- On the buying side, private equity firms and licensing specialists such as Xcel Brands (NASDAQ:XELB), Iconix Brand Group (NASDAQ:ICON), and Sequential Brands Group (NASDAQ:SQBG) are the deal chasers.
- There's also the Amazon (NASDAQ:AMZN) factor if the online juggernaut becomes more active in seeking out vertically integrated brands.
Sep. 3, 2015, 4:23 PM
- Amazon Web Services (NASDAQ:AMZN) is buying Elemental Technologies, a Portland-based provider of video encoding software for pay-TV providers, broadcasters, online video providers, and enterprises. The Information reports Amazon is paying around $500M in cash.
- Elemental clients include ESPN, ABC, CNN, the MLB, the NBA, and BBC. In addition to software for handling live online streaming, video file conversions, bandwidth optimization, and multi-screen delivery, the company's offerings include a cloud video-processing/delivery service that leverages its software.
- Not surprisingly, Amazon plans to pair Elemental's software with AWS' cloud infrastructure. The company promises to "provide media and entertainment companies with a range of integrated solutions," and to create "next-generation services that feature a range of solutions for customers leveraging on-premises assets, hybrid architectures, and cloud."
Sep. 2, 2015, 4:57 PM
- Prestige studio Miramax, previously rumored to be exploring a sale, has hired Morgan Stanley to find a buyer, Bloomberg reports.
- Qatari investment bank QInvest will co-advise on the process, which is said to start formally after the Labor Day holiday. The studio is part-owned by Qatar through the country's sovereign wealth fund.
- Miramax could be looking for up to $1B after its current owners bought it from Disney for $660M in 2010, and bidders could include streaming services like Hulu (CMCSA, DIS, FOX, FOXA), Netflix (NASDAQ:NFLX) or Amazon.com's Instant Video (NASDAQ:AMZN), or studios like MGM or oft-rumored buyer Lions Gate (NYSE:LGF).
- Miramax's most recent release is Mr. Holmes, with Ian McKellen as famed detective Sherlock Holmes, and it currently produces From Dusk Till Dawn, the TV adaptation of the film now in its second season on the El Rey network.
Jul. 17, 2015, 8:27 PM
- Miramax, the studio home for prestige films founded by Harvey and Bob Weinstein, is looking for a buyer in a sale it hopes will draw $1B, Bloomberg reports.
- Investment is coming back to the film sector in a rebound year for movies, and studio owners Colony Capital and Qatar Holding are betting that content-hungry distributors will take an interest in an award-heavy film library, including Oscar winners like Shakespeare in Love, Pulp Fiction and Good Will Hunting.
- Colony Capital and the Qatar sovereign wealth fund were among the group that bought Miramax from Disney for $660M five years ago.
- Potential buyers? That could include content-acquisitive streaming services like Hulu (CMCSA, DIS, FOXA), Netflix (NASDAQ:NFLX) or Amazon.com's Instant Video (NASDAQ:AMZN), or studios like MGM or oft-rumored buyer Lions Gate (NYSE:LGF), says Variety's James Rainey. A price of $1B is too steep for some of them, but with low information, it's tough to put a solid value on Miramax.
Jul. 14, 2015, 1:13 PM
- A day after Rackspace (NYSE:RAX) announced a services partnership with Microsoft related to Azure, shares are rallying in response to a CRN report stating a similar deal with Amazon Web Services (NASDAQ:AMZN) is close.
- CRN states a channel partner for both Rackspace and Amazon "approached his company with an offer to participate in a beta program in which Rackspace would manage and provide support for his customers hosting workloads in Amazon's cloud." The source: "They are going to wrap their managed 'Fanatical Support' around AWS and essentially become an Amazon reseller."
- AWS had revenue of $5.16B over the 12 months ending March 31, and (per Synergy Research) still controls nearly 30% of the global cloud IaaS/PaaS market.
- Rackspace is now up 8.5% over the last two days. Shares are still down 17% YTD.
Mar. 31, 2015, 3:16 AM
- Swiss luxury group Richemont (OTCPK:CFRUY) says it will merge its Net-a-Porter unit with Italian fashion site Yoox (OTCPK:YXOXY) in an all-share deal aimed at gaining a larger share of the fast-growing online luxury market.
- A report last week suggested that Amazon (NASDAQ:AMZN) was in talks to buy the online luxury retailer.
- Richemont said it will receive 50% of the combined entity, but its voting rights will be limited to 25% to preserve the unit's independence.
- Yoox shares are up 7.1% in Italy.
Mar. 27, 2015, 1:49 AM
- Amazon (NASDAQ:AMZN) is in talks to buy online luxury retailer Net-a-Porter in what could be the biggest acquisition yet for the e-commerce giant, Women's Wear Daily reports.
- Amazon has long coveted the high-end fashion retail sector and any deal for Net-a-Porter, which is owned by Swiss firm Compagnie Financire Richemont (OTCPK:CFRUY), could come with an approximate €2B price tag.
Mar. 12, 2015, 6:02 PM
- 2lemetry's cloud-based platform serves as middleware for large networks of Web-connected embedded devices - the proverbial Internet of Things (IoT). It translates the various protocols used by connected devices, sets messaging rules, and analyzes the data traffic it handles to derive insights.
- The startup boasts its solution can work with any protocol or hardware platform, automatically add new devices as they join a network, and scale to millions of devices without hurting performance. Honeywell is among the company's enterprise clients.
- Amazon (NASDAQ:AMZN) has bought 2lemetry for an undisclosed sum, and says it will continue supporting the company's clients. 2lemetry's services appear to complement AWS' Kinesis service, which provides real-time processing for massive data streams, including for data produced by IoT devices and sensors.
- TechCrunch notes 2lemetry's Incoming service might particularly interest Amazon - it helps companies (such as retailers) interact with customers using data obtained via proximity beacons, geofencing, facial recognition, and other sources.
- Though better known for their machine-to-machine (M2M) communications hardware, Sierra Wireless (NASDAQ:SWIR) and CalAmp (NASDAQ:CAMP) are two companies that have been going after the budding IoT service market. Sierra recently bought M2M connectivity/messaging service provider Wireless Maingate, and CalAmp has launched its Connect service platform for deploying and managing M2M devices.
Mar. 4, 2015, 1:58 PM
- A day after slumping to new post-IPO lows and coming within $0.03 of $80, Alibaba (NYSE:BABA) has seen dip-buyers emerge in large numbers. Naturally, Yahoo (NASDAQ:YHOO) is along for the ride.
- The gains come as a Chinese publication reports Jack Ma once said he considered acquiring Yahoo, which plans to spin off its Alibaba stake into a publicly-traded company in Q4. Ma's alleged comments: "The acquisition of Yahoo is something I worked [on] a couple of years ago, this is a political problem, not an economic problem, Yahoo is a media [company], more sensitive."
- There has already been speculation Alibaba will try to buy Yahoo's spinoff (much less politically challenging than buying the whole of Yahoo) at some point. Bloomberg's Matt Levine has noted the spinoff will have to wait a year before a deal occurs, in order to maintain its tax-free status.
- Meanwhile, Alibaba's Aliyun cloud services unit (a giant in the Chinese cloud infrastructure market) has opened a Silicon Valley data center, its first in the U.S. For now, the data center will cater to Chinese companies with U.S. operations, but it plans to go after non-Chinese clients later this year. When it does, Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG), Microsoft (NASDAQ:MSFT), and a slew of other incumbents will be waiting.
Feb. 3, 2015, 2:24 AM
- A new Bloomberg report suggests that Amazon (NASDAQ:AMZN) has discussed acquiring some RadioShack (NYSE:RSH) locations, joining other potential bidders, including Sprint (NYSE:S) and investment group Brookstone.
- Amazon would use the stores as showcases for its hardware, as well as potential pickup and drop-off centers for online customers.
- The NYSE suspended trading of RadioShack's shares yesterday, after it failed to have an average market value of at least $50M for 30 straight days.
Jan. 22, 2015, 2:54 PM
- Amazon (AMZN +4.3%) has acquired Annapurna Labs, an Israeli chipmaker that has provided few details about the silicon it's working on. The NYT reports the purchase price is $350M. The WSJ previously reported of a $350M deal price, while adding the final tab could be $375M if certain conditions are met.
- According to the WSJ's sources, Annapurna is developing "midrange networking chips for data centers, offering improvements over existing products in terms of information-transmission rates and power consumption." Israel's Calcalist reports the company is developing "microprocessors that allow fast data traffic for low-power computing servers and storage servers." It also notes CPU core giant ARM (NASDAQ:ARMH) is an investor.
- AWS' data centers contain hundreds of thousands of servers running Intel (NASDAQ:INTC) x86 CPUs. Though Amazon has downplayed the efforts of 3rd-party ARM server CPU vendors, it has also hired several key engineers from defunct ARM CPU vendor Calxeda, a move that has fueled speculation Amazon is prepping its own ARM server chips. Annapurna could assist with the effort.
- The news comes on a day in which Piper has assigned AWS a ~$32B valuation.
- Earlier: Amazon rallies following eBay's earnings
Nov. 26, 2014, 1:48 PM
- Bloomberg reports Amazon (AMZN -0.5%) has finished internal talks to buy top Indian online fashion retailer Jabong. VCCircle reports Amazon has "completed its first level of talks" to buy Jabong, and that the deal could be worth $1.1B-$1.2B.
- Jabong had a 1H14 GMV of INR5.1B ($82.9M) courtesy of 3.2M orders, up 3x Y/Y. The company is backed by German e-commerce VC firm/incubator Rocket Internet.
- Indian restrictions on retail foreign investment could stand in Amazon's way. However, the new government is reportedly open to loosening e-commerce-related restrictions.
- Amazon committed to investing $2B in India earlier this year, where it faces off against local giant Flipkart and eBay-backed marketplace Snapdeal. Alibaba just stated it plans to expand its Indian presence.
Amazon.com, Inc. provides online retail shopping services. It provides services to four primary customer sets: consumers, sellers, enterprises, and content creators. The company also provides other marketing and promotional services, such as online advertising and co-branded credit card... More
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