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Michael428

Michael428
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  • Amazon: Will Solid Q3 Revenue Growth Be Enough? [View article]
    You did a really good job. Establishing a ratio between Channel Advisors growth and actual Amazon revenue growth was an excellent idea. Paulo has been totally on top of using Channel Advisors to predict revenue, but I am not positive I have ever seen a ratiio (which I could have missed). Plus you factored in the e-book accounting change, which my guess is many of the "revenue watchers" don't know about...but this I know Paulo was on top of.

    At the moment I think the cloud revenue and profitability is the largest factor affecting Amazon. I believe this because those price cuts that Amazon had to match were huge, we know they hit the bottom line and I keep coming back to the balance sheets of the other large cloud players. The word "war" in the phrase price war is very accurate. Like Polish horses were no match for German tanks in September, 1939, Amazon's cash is no match for Google's and Microsoft's. This cloud war could be very costly.

    So Amigibulls, anyway you can predict cloud revenue with a stab at cloud profitability?
    Aug 21 07:02 AM | 1 Like Like |Link to Comment
  • Amazon: $389 Or $209? Pick Your Scenario [View article]
    And I get to approximately the same valuation, not using the "voodoo logic" of 10 year projections.

    I use the finance I lack, to compare Amazon's balance sheet with the balance sheets of MicroSoft, Google, Oracle and the other well capitalized competitors in the cloud.

    In my opinion, once Google announced those massive price cuts in the cloud...it was a simple declaration by Google that it was "game on".

    Amazon has tons of problems that have been more than well documented, but I think Amazon's biggest problem, (which has been more or less ignored) is their balance sheet. Not even the funding of cash through A/P growth or convincing the employees to spend $1.25 billion a year in stock, that might be worth 20% of that payroll loss, can hide the weakness.

    And there was no accounting in any 10 year model I have seen, in how big a problem, a cloud price war (which anyone following the company knows) will be to a company with a balance sheet so much weaker than their competitors.

    Check!
    Aug 20 12:48 PM | Likes Like |Link to Comment
  • Amazon: $389 Or $209? Pick Your Scenario [View article]
    <<<I must say this 20 year talk is funny stuff from the whiners here losing the AMZN short bets daily! lol>>>

    I think a better way to look at the shorts would be someone who was down by 5 at the 10th tee.

    There is no question that golfer would be losing. If that golfer defaulted he would have lost. But in no way is the match over.

    I do agree however almost all the longs would be big winners and my analogy above is not relevant.
    Aug 20 09:51 AM | Likes Like |Link to Comment
  • Amazon: $389 Or $209? Pick Your Scenario [View article]
    Aton Ra Partners

    Not very thick skinned are you?

    How do you know how strong my background in finance is?

    I missed Michael Lewis' book on your genius. Please send me a link so I can purchase.

    And to both you and Paulo, I repeat. A model 10 years out is just the work of someone whose ego has gone a tad too far.
    Aug 20 08:45 AM | 1 Like Like |Link to Comment
  • Amazon: $389 Or $209? Pick Your Scenario [View article]
    What a silly article!

    The silliest part is predicting what will happen in 2024....but let us go on.

    The "market" which counts says the stock is worth $335.

    The company will most likely have a loss this year, so at 50 times earnings the valuation is zero.

    Tangible book is about $16 a share. But the company is worth much more than that because of all the "buying history of a massive customer base". So would three times tangible book or about $50 a share (between $20 and $25 billion) be correct?

    I think a better article would be:

    What could the company be worth in a distressed sale?
    Aug 20 08:10 AM | Likes Like |Link to Comment
  • Amazon: Profit Is Not In The Dictionary [View article]
    Michael Dance

    I agree not many investors looking for a safe haven would invest in Amazon.

    But as money moves into dollars, much of that money is invested in equity funds, which hold Amazon.
    Aug 18 11:47 AM | Likes Like |Link to Comment
  • Amazon: Profit Is Not In The Dictionary [View article]
    Very nice article. You touched a lot of bases.

    The problem is "the market" trumps all financial logic at least for the short term. I thought Amazon was overvalued at $200 in 2011 after the company earned $2.58 in 2010. The company will probably have a loss this year, the stock is selling at $333 and "the market" won. In 2011, I would have thought the odds of the above happening would be close to zero. I was wrong on my odds and my short position.

    There is a lot of "stuff" going on in the rest of the world...watch the news every night to see all the stuff. All this stuff, in my opinion, makes the US dollar to place to be. So a lot of those dollar investments could flow into Amazon stock.

    In the long run, I would think Amazon has to show some profit especially if interest rates rise and the US is not the safe haven for the rest of the world. But there is also the possibility Amazon re-invents itself the way Apple did, 10 or so years ago. Plus even the most bearish of Amazon evaluators (of which I am one), must see how the customers love the company which has to help the stock price.

    So we wait and no matter what happens, we get a history lesson.
    Aug 18 07:49 AM | 1 Like Like |Link to Comment
  • Why Can't Google And Amazon Just Get Along? [View article]
    Amit

    I think the easiest way to get a "basic idea" of the margins in the cloud business is look at Rackspace financials. Rackspace is a cloud company (so no confusion with different businesses in a company's financials) and maybe not a perfect match for Amazon/Google, a better match than Salesforce which is providing more of a software in the cloud service. As an aside, Salesforce's GAAP earnings are non-existent.

    So back to Rackspace. In 2013 revenue was about $1.5 billion and about $87 million in profit or an about 6% net. My gut is this Google/Amazon war, both in close to the same space will have margins much worse than this and even possibly negative.

    Amit, as an aside, excellent article. I read every AMZN on Seeking Alpha and saved in an e-mail folder a handful. I will save this one.
    Aug 13 09:24 AM | 1 Like Like |Link to Comment
  • Update: Rackspace Hosting Earnings [View article]
    Chris

    I thought that Rackspace pretty much was in the same cloud space as Amazon and Google.

    If so, then the Google price cuts should have affected Rackspace but they hit their earnings estimate (16 cents) exactly and revenue number ($440 million) almost exactly. Plus not much change in the company's forward guidance.

    Any thoughts on this? Is the space different? Does Rackspace have longer term contracts?

    Thank you
    Aug 12 07:57 AM | Likes Like |Link to Comment
  • Update: The Fire Phone Flops Like A Dying Fish [View article]
    Toneguru

    I agree with your logic.

    In fact after reading the cover story in Barron's this week about Zillow using non-GAAP accounting which does not expense Stock Based Comp and was selling for about 20 times revenue and has a GAAP loss, I decided Amazon was a mind-blowing bargain (even though Amazon may earn nothing this year).

    I also agree the Fed will keep both stocks up. On Friday the interest rate on the 10 year Treasury was 2.37% so the stock market is the place to be.

    But here is the little glitch. Zillow went public recently and has the cash they need. Amazon is going to need cash at some time in the future.

    So where both companies get a pass from the Fed. Amazon is going to need another pass when they either issue more stock or go to the bond market.

    Plus I agree with Paulo that Amazon's problems are structural. So I do not see how Amazon earns that 63 cents in Q4 this year. Amazon may need a third pass, if they miss that number hugely.
    Aug 11 09:43 AM | 1 Like Like |Link to Comment
  • Update: The Fire Phone Flops Like A Dying Fish [View article]

    Furma

    Good input and what a shock.

    M
    Aug 11 09:34 AM | Likes Like |Link to Comment
  • Amazon Delivery Drones: Indications Point To India For Beta Testing [View article]
    Seeking Alpha -

    Does anyone there read some of these things that are published? Or do you take off Sunday also as we do in the United States?
    Aug 10 01:47 PM | 7 Likes Like |Link to Comment
  • Amazon's Sacred 7 Numbers Show It's Overvalued [View article]
    ReligiousWacko

    I don't think there is much thinking of Amazon longs.

    To me it is the same thinking of people who kept buying multiple homes as investments in 2006, thinking housing prices would appreciate forever. My guess is the correlation of the thinking of Amazon longs and those 2006 housing longs is excellent, as the mindset must be similar.

    As for Paulo. I think Amazon's ultimate demise will generate a book. Books have a subject but it is always nice to tell a story through people. Like Michael Lewis' book, "The Big Short", told the story by using the Deutsch bank traders betting against the sub-prime mortgages. I think Paulo is so brilliant, he should have the same role in the Amazon demise book.

    M
    Aug 9 09:44 AM | 1 Like Like |Link to Comment
  • Amazon's Sacred 7 Numbers Show It's Overvalued [View article]

    Streetwatcher

    <<<Consumers do not mind paying taxes>>>

    Wow!

    And what evidence do you have to make, in my humble opinion, one of the most inane comments I have ever read in all the time I have been reading Seeking Alpha.

    Did you ever hear, for just one of probably thousands of points I could make, that cigarette smokers driving from Florida to the north-east stopping in North Carolina to buy cigarettes because the cigarette tax is lower.
    Aug 8 08:24 AM | 1 Like Like |Link to Comment
  • Amazon's Sacred 7 Numbers Show It's Overvalued [View article]
    I don't understand how anyone can write an article on Amazon titled "7 Sacred Numbers" and not list the states Amazon is now forced to charge SALES TAX and list the present total % of either population or income in those states as one of the relevant numbers.

    Plus a lot of the other comments regarding cash flow and capital leases, force me to give this article an "incomplete" grade at best.
    Aug 7 12:47 PM | 1 Like Like |Link to Comment
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