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Author Topic: AMAZON An Enigma ?  (Read 83 times)

singhg5

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AMAZON An Enigma ?
« on: January 30, 2015, 04:34:59 AM »
If I am not mistaken, Amazon has not earned money for several years. In yesterday's news, it was reported that Amazon made a couple of hundred million dollars in recent quarter BUT it had lost the same amount in the previous quarter. Net profit is still close to zero.

How does this company survive ?  Is there any hope for it or is it just a bubble waiting to burst in near future ?
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Arizoni

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Re: AMAZON An Enigma ?
« Reply #1 on: January 30, 2015, 05:10:07 AM »
A lot of Amazons profit is reinvested in itself to grow the company.
This can show up as a loss on the books but in reality little is lost and the company gains.

Showing a large profit indicates to many, that this "reinvesting in itself " is on a downswing which many stock holders feel is a negative for the company.

There also is a bit of "Creative Accounting" that pretty much goes along with the story about three accountants showing up for a job interview.

The HR man sits them down and hands each one a tablet.
He then asks, "How much does 3 + 8 - 4 equal?  Write your answer on the tablet I gave you."

The first applicant held up his answer.  He had written "6"..
The second applicant held up his answer.  He had written "7".
The third applicant held up his answer.  He had written, "How much do you want it to equal?"
The third guy got the job.  ;D
Jim
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Re: AMAZON An Enigma ?
« Reply #2 on: January 30, 2015, 05:16:00 PM »
A lot of Amazons profit is reinvested in itself to grow the company.
This can show up as a loss on the books but in reality little is lost and the company gains.

Showing a large profit indicates to many, that this "reinvesting in itself " is on a downswing which many stock holders feel is a negative for the company.

There also is a bit of "Creative Accounting" that pretty much goes along with the story about three accountants showing up for a job interview.

The HR man sits them down and hands each one a tablet.
He then asks, "How much does 3 + 8 - 4 equal?  Write your answer on the tablet I gave you."

The first applicant held up his answer.  He had written "6"..
The second applicant held up his answer.  He had written "7".
The third applicant held up his answer.  He had written, "How much do you want it to equal?"
The third guy got the job.  ;D

All of this and the fact that Amazon has a quirky CEO who does what he wants to do. The board has tolerated him thus far because there will be a huge upside when Bezos decides to cash in.