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How Long Can Wayfair Last?

Summary

They lose a little on each sale but they make it up in volume.

Revenue over $1.5 billion per quarter and still losing money.

Stockholder's equity is negative and growing.

Wayfair is a company with an $11 billion market cap, revenue of over $1.5 billion, according to the 10Q report for the period ending June 30, 2018, and loses about $100 million per quarter doing it. They lose a little on each sale but make it up in volume!

It is like a replay of the high tech wreck of the late 1990s and internet boom. Wayfair in the prior comparative period had less revenue and a smaller loss, so apparently the business plan is to sell more and lose more doing it.

Everyone knows how this all ends, everyone in it plans and thinks they will ‘get out’ of the trades as the stock starts to finally slip after several quarters of losses and revenue gains flatten out, but instead will stay in as they hope for the next bounce in the stock price to recover their lost profits and end up with losses.

I find it somewhat amazing that a company with over a billion on revenue per quarter and large and growing losses has its stock trading near an all time high and seems to have no trouble getting financing or terms from its vendors.

But what do I know, when I invest in a company I expect the company to make a profit and maybe even pay a dividend (or buyback shares) if the company has paid off its debt and has no better growth prospects.

Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Additional disclosure: I may buy some put options but not short since the muppets keep bidding this up to new highs!