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Amazon - A Public Company Or A Cooperative For Consumers ?

Jul. 26, 2013 12:45 PM ETAMZN4 Comments
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I can't make up my mind and answer this question - even more so after the latest earnings: All revenue with little to no net profits. This chart from April 2013 already made the point better than a thousand words:

(Source: g.foolcdn.com/editorial/images/33816/amz... )

It's easy to see: Apple made more money in a recent single quarter than Amazon over its lifetime a as public company.

Yet Apple only enjoys a little over double the market cap of Amazon (400bn USD vs 150bn USD).

And Amazon stock keeps ticking up. It's at all time-highs today at well over 300 USD. All this based on "cementing market dominance", "investing for the future", "cloud leadership", "establishing a leadership position in global e-commerce" and other terms analysts make up because they can't rationalize AMZN's valuation fundamentally at these levels.

As one SA commenter jokingly commented today:

Be happy $AMZN didn't declare bankruptcy. It would be over 500.

I wouldn't touch this stock - rational people would probably like to short it on a fundamental/valuation basis, yet momentum buyers will probably keep buying it: AMZN stock has been going up with little to no breaks since November 2008 when it was trading under 40 USD.

This is a no-win scenario for long-term investors in 2013. I would stay away from this stock for now and neither take a long nor short position.

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