Seeking Alpha


Send Message
View as an RSS Feed
View Michael428's Comments BY TICKER:
Latest  |  Highest rated
  • Can Amazon Repeat Its Last Earnings Performance? Doubtful [View article]
    <<<Overall AWS revenue climbed to $1.82 billion for the quarter ended June 30, up 81 percent, while operating income was at $391 million, a gain of 407 percent. It has an operating margin of 21.4 percent.>>>

    There are two major deceptions with these numbers.

    The first deception is this is Operating Income, which does not include interest expense or income tax. Interest has nearly tripled because of the dramatic increase in debt (both the bonds and the capital leases) in the last few years. Plus most of this debt/interest is on the servers to support AWS.

    The second deception is the Operating Income (that is reported for AWS but not the business as a whole) is a non-GAAP number as it does include the Stock Based Comp. I do not understand how the company gets away with this one.

    This emperor might really have no clothes.
    Aug 2, 2015. 08:36 AM | 6 Likes Like |Link to Comment
  • Amazon Setting Another Bear Trap? [View article]
    Nice article. Well done and balanced. You presented both sides well.
    May 27, 2015. 09:35 AM | 4 Likes Like |Link to Comment
  • Why Thinks It Is So Valuable [View article]

    What I do not understand is:

    Customers love the software....I think that is pretty much a given.

    The company had a $263 million GAAP loss in 2014 (GAAP dictates they had to expense the $565 million of stock comp).

    Why can't the company charge more for the software and make a profit?
    May 26, 2015. 10:01 AM | 2 Likes Like |Link to Comment
  • Why Is Only Worth About $40 Billion To Bidders [View article]
    The company announced yesterday GAAP earnings of one cent....a penny.

    Read the transcript. All the gushing analysts acted as if the company founded ways to eliminate global warning, terrorism and all disease.
    May 21, 2015. 03:40 AM | 5 Likes Like |Link to Comment
  • Chevron, Sharply Negative Cash Flow, Dividend Under Threat [View article]
    Did the author of a close to inane article even bother to look at the balance sheet?

    I think a barrel of oil dropped to close to $42 a barrel in Q1. Not only did the company earn a GAAP profit greater than the dividend but they increased equity by almost $800 million. Pretty amazing quarter in my mind.

    As an aside WTI is currently trading at $61.06 a barrel. This article would make better sense if a well head blew up and was spewing oil all over the Florida Keys.
    May 6, 2015. 12:31 PM | 4 Likes Like |Link to Comment
  • Update: Amazon Will Report Amazon Web Services Numbers Next Quarter [View article]

    Thank you for the comment.

    I also use RackSpace as a tool to evaluate what AWS might be worth if AWS was broken off.

    RackSpace which is estimated to have $2 billion in revenue in 2015 has a current market cap of $6.5 billion.

    The problem is Rackspace is currently profitable and Amazon is not.

    I believe AWS as a stand alone company is the most valuable piece of the Amazon conglomerate. But again Amazon is not profitable. So if AWS was say as profitable per revenue dollar as RackSpace, the Amazon without the AWS piece, would even be less profitable than it is now.

    The emperor has no clothes.
    Feb 1, 2015. 04:38 PM | 4 Likes Like |Link to Comment
  • Update: Amazon Will Report Amazon Web Services Numbers Next Quarter [View article]
    Amazon has no P/E and not a sky high P/E as you said.

    In order to have a P/E, a company needs to have earnings. Amazon lost 52 cents in 2014. When you divide a positive number (price) by a negative number (earnings), you get no result.

    Moving on to forward earnings, the average earnings estimate for Q1 and for Q2 is a loss also. So we can assume Amazon will also have no earnings in 2015 and also have no P/E in 2015.

    AWS is in North American Other not Other, which includes International Other.

    AWS is in a massive price war with MicroSoft, Google and IBM. We do not know if AWS is profitable and we also do not know what breakdown will be given on AWS. The only thing that may be given is revenue.
    Feb 1, 2015. 09:47 AM | 8 Likes Like |Link to Comment
  • My Take On's Q4 2014 Earnings [View article]

    That was an excellent point subtracting the increase in working capital.

    Your number gives a lot more weight to the point I was trying to make.

    Calculating cash burn is a pretty tricky exercise but NYer1's modification to a $6.6 billion number might be pretty close to what I was looking for.

    GREAT JOB !!
    Jan 31, 2015. 03:38 PM | 1 Like Like |Link to Comment
  • My Take On's Q4 2014 Earnings [View article]

    The bonds were not negatively affected by the release.

    The coverage ratio is very simple. EBIT.

    The bonds easily met the coverage ratio.

    Staying on the bonds, the guidance, as Paulo said was not good.

    My guess is the company has losses in Q1, Q2 and Q3 and may not meet the coverage ratio. The I in EBIT will become relevant because the interest will grow in 2015. Then we might expect a downgrade depending on the size of the EBIT differential.

    But remember these bonds, which have yields set for the duration of the bonds, compete with yields at a certain period of time. So if you ask your question after Q3, I would for my own objective, have an answer for you.
    Jan 30, 2015. 05:35 AM | 5 Likes Like |Link to Comment
  • My Take On's Q4 2014 Earnings [View article]
    From the Balance Sheet

    2013 long term debt $3.191 billion
    2013 long term liabilities. $4.242 billion
    2013 Total $7.433 billion

    2014 long term debt $8.265 billion
    2014 long term liabilities. $7.410 billion
    2014 Total $15.675 billion

    Increase between 2013/14 $8.242 billion 111%

    The cookie jar is closed.
    Jan 29, 2015. 11:12 PM | 31 Likes Like |Link to Comment
  • Amazon +8%; EPS beat, margin gains overshadow revenue softness [View news story]

    The company also has slides for the conference call giving free cash flow after capital lease obligations.

    I wonder if any of the analysts are smart enough to pick up on this.

    I also wonder if E&Y gave Amazon a little talk behind the wood shed or whatever?
    Jan 29, 2015. 06:44 PM | 3 Likes Like |Link to Comment
  • Amazon +8%; EPS beat, margin gains overshadow revenue softness [View news story]

    Check out page 12 Supplemental Financial Info and if you want compare with page 10 in 2013/Q4 release, same heading.

    They added many new lines dealing with capital lease obligations, lease payments, and free cash flow after these lines. A negative $2.2 billion.
    Jan 29, 2015. 06:39 PM | 5 Likes Like |Link to Comment
  • Should Hoteliers Be Concerned With Amazon Becoming The Next Mega OTA? [View article]
    I think Amazon should get into much more than the booking space, I think Amazon should get into the travel business "whole-hog".

    I think Amazon should first buy an Airline. Southwest will do. Then they could book space on their own airline.

    After that car rental should be next. Amazon has to watch their dollars here. So I think buying National would be a good idea.

    Why should Amazon book travel at some one else's hotel, when they could own their own brand. I think Marriott would fit in nicely.

    And while we are at it, let us not forget the cruise industry. Royal Caribbean would be a perfect fit.

    I think the problem with your article was you weren't thinking big enough. Amazon has a $140 billion market cap. With a cap like that the possibilities are endless!
    Jan 29, 2015. 06:05 AM | 10 Likes Like |Link to Comment
  • Amazon launching cloud corporate e-mail platform [View news story]
    Allan and staux

    This is getting easier than I thought, and I haven't even looked at page 10 of the Q.

    $750 million of the 2012 bonds expire in 2015

    $1 billion of the 2012 bonds expire in 2017

    I am pretty sure the 2014 Bank of America $2 billion credit line is only good for 2 years with an option for 3. By 2016, Bank of America would be beyond silly to extend that debt. Ken Lewis, buyer of Merrill and Countrywide, is gone.

    Now that I have both of your attention. The two of you, Slim or Paulo can easily model this. It took me too long to understand those capital leases.

    This stock can sell at $300 with analyst quarterly loss estimates forever, but once they run out of cash. Game over.

    Have a good night all, I'm done until tomorrow.
    Jan 28, 2015. 08:17 PM | 2 Likes Like |Link to Comment
  • Amazon launching cloud corporate e-mail platform [View news story]

    There were numbers thrown about when those capital lease articles hit about cash flow being negative $2 to $3 billion a year.

    My guess is that might include the Stock Comp. I would not include that, because if an employee wants to take stock, well good for Amazon.

    So where I am headed is, what would the model look like for real cash burn. How hard would it be to do such a model?

    I just checked 2015 analyst earnings estimates on Yahoo and it is now down to 59 cents. My guess is starting from such a low number, every quarter gets estimated down to a loss, and that is one thing Amazon is good at, having a quarterly loss.

    So I think the only way reality hits here is burning that $8 billion and I was just wondering how long that could take and if we can come up with a tool to measure it.

    Jan 28, 2015. 07:05 PM | 1 Like Like |Link to Comment