mikebrah

Amazon Insider Sales: Does Jeff Bezos Know Something?

I happen to be bear on AMZN, but this data is irrelevant when you consider he still has 97 MILLION SHARES LEFT.

Regardless of your thoughts on the stock, you can't blame a guy for taking 5% off the table.

Just my $.02

MM

Amazon Buys Out Lexcycle to Defend Itself and the Kindle

Well, that logic works both ways. Everyone knows everything you have said and therefore it is priced in too. How is being long any less arrogant than being short? If you're long, then you are saying you know more than others because you know it will go up from here. If we take for a given that the price of the stock is going to change, then someone has to be right. It has to go up or down, so if we both do research but come to different conclusions how can either of us be more arrogant than the other?

Anyway, thanks for the response.

MM

Amazon Buys Out Lexcycle to Defend Itself and the Kindle

MoNey, raytayzmd, and astrowave:

I am new to the AMZN boards so if this comment is redundant from prior discussions I apologize, but:

I readily acknowledge AMZN is a great, well run, innovative company. But from an investment perspective I just fail to see how the Kindle, and all the e-book sales that go with it, justify the current price.

To me, the bottom line is that they are just altering the way you experience a book. In other words, customers are still going to only buy a book once so what does it matter what form that book takes?

The iPod/iTunes example is a great illustration of my point. That was an entirely untapped market, both for Apple and the consumer. Apple's margins on the actual iPod were (and still are) fantastic. Then on top of that, it has the absolute cash cow that is iTunes. But the personal mp3 player as well as the software to use one were both relatively untapped markets prior to Apple's entrance.

This is not true with Amazon's Kindle. A whole new group of consumers may SWITCH from reading books to reading the Kindle, but they will not do both (not with the same title, I mean). So maybe the margins are better on the Kindle, I still don't see how that justifies the current price or the expectation of enormous sales growth because as I said above, customers will still only purchase a book once. So whatever sales increases AMZN sees in the Kindle it should see a matching decline in real books, right? Am I missing something?

I said on some other post that I think AMZN is a great company. They definitely are, and I totally concur about the idea of them being a great example of what capitalism could and should be (along with GOOG, AAPL,and Zappos). But as an investor, that just does not justify paying upwards of $80/share for the profits they produce.

Please explain the fault of my logic, because if there is one I would appreciate it being pointed out to me. Disclosure, I am just recently short AMZN. But I would like to discuss the issue if any of you are interested. Maybe you see something I don't and you will lead me to cover my short before I get blown out of the water.

Thanks,
MM

Amazon: How High Can It Go?

Stock trades at $85 but I think it's going to $72...make sure you hold on to this baby!

MM

Amazon: How High Can It Go?

Dan Geiman, McAdams Wright Ragen: Hold rating; target to $72 from $56. “Surprisingly strong margin performance, some of which may not be sustainable going forward.”

Frederick Moran, Benchmark Co.: Upgraded to Hold from Sell, target to $80, from $60. “Amazon has proven resilient and will show continued growth in a challenging retail environment, but [we] remain concerned about the large valuation premium relative to earnings growth.”


How does one recommend holding a stock and in the same breath give a price target BELOW the current price? Who listens to these people?

MM

Amazon Q1: Beats Expectations, Highlights Kindle 2 Success

CORRECTION:
3rd paragraph
"....no bullish case anywhere that uses any TIME (should read: type)"


sorry
MM

Amazon Q1: Beats Expectations, Highlights Kindle 2 Success

OK, I just do not get this at all. Every bull case I read for AMZN contains absolutely NO financial justifications. It is all storytelling, with key words like: growth, innovative, increased margins, etc. etc.

That is fine, and I readily acknowledge all those attributes to be true. But that does not justify paying infinity dollars per share to buy this company. Even if you have a product that cures every known disease, there is still a price where it becomes a bad investment.

AMZN trades over 50x its earnings. I have read no bullish case anywhere that uses any time of financial estimates to explain why buying AMZN for $80/share is advisable. If 50x earnings is still a bargain, then what is fair value? 75x, 80x, 100x? The company just does not make that much money and the coolness of its product does not contribute to your ROIC.

I hope it pops to $90 on this as I look forward to adding to my short.

MM

Why Amazon Will Continue to Outperform in This Sluggish Market

The author's storytelling skills rival the best children author's out there.

AMZN - $35 Billion market cap
AMZN - ~$650 Million net income last year.

I don't care how many kindles they plan to sell, or how many free shipping subscriptions they book....paying 55x net income for a company as mature as AMZN is ludicrous.


Disclosure: just opened a short AMZN position today. I did no further analysis than the above mentioned facts.

As an aside, I think AMZN (just like GOOG and AAPL) is a well run, cool, innovative company. Unfortunately those aren't my investment criteria. I generally prefer a huge return on my investment over coolness.