Amazon

[learntoinvest2022]

Buy Amazon stock now or Wait till after the stock split?

In the recent first quarter of 2022, Amazon stock reported mixed results. The company fell short on its earnings but did match expectations for revenue. This was the first time in at least four years that the company reported a net loss. Furthermore, Amazon also expects slower outlook growth of between 3% and 7%. This has definitely raised concerns for some investors and thus Amazon stock have took quite a beating and have decreased over 28%.

The company saw 30-40% expansion in revenue growth in 2021. Like many tech giants, the company is attributing the decline to macroeconomic factors as well as Russia’s invasion of Ukraine. After the announcement, the shares have plunged by about ~20+%. Have the fundamentals of the business changed? So let’s take a closer look at its main business and financial outcomes in order to better assess Amazon’s overall performance.

Let’s take a look at what Amazon has to offer. Let’s find out!
https://learntoinvests.com/amazon-stock/

[weijian]

Similar DNA even with a new CEO?

So far, the FAANMG (Facebook, Apple, Amazon, Netflix, Microsoft and Alphabet) group has had CEO changes for 3 of them and all 3 produced positive to great results (Apple-Tim Cook, Microsoft-Satya Nadella and Alphabet/Google-Sundar Pichai)

Will the new Amazon CEO Andy Jassy keep up to similar?

Amazon quietly buys land across the US, builds property empire

Amazon is courting a new class of investor to help finance the expansion, besides developers narrowly focused on building for profits. USAA Real Estate Co., Softbank Group Corp.’s Fortress Investment Group LLC and GLP Capital Partners LP are among the investment firms interested in financing Amazon’s expansion with transactions that more closely resemble corporate bonds than lease agreements

For developers, the new strategy makes dealing with Amazon more complicated. Many are hesitant to show the company land they’re hoping to acquire and then lease to the e-commerce giant, fearing that Amazon will decide to try and buy it, said the sources. As Amazon considers other strategies, including buying and developing parcels itself, says a person familiar with its strategy, the company has been abruptly scuttling deals. Over the last year, Amazon has backed out of dozens of proposed delivery centres, said developers and brokers.

“People are pissed off,” said one real estate developer who has done business with Amazon and had a recent deal fall through. “They’re just cutting their partners out who helped them get to where they are right now.” The company denied relations with developers have soured and said it needs them as partners as much as developers need Amazon.

https://www.businesstimes.com.sg/compani...rty-empire

[CY09]

I guess it is due to the scale of Amazon. Its similar to shipping, if Amazon is shipping enough parcels such that it can fill multiple containerships from ports daily, why not own container ships directly so that it has control of the shipping schedules.

This is applicable to Amazon's properties.

One example of corporate evolution is DHL. The company soon become good enough and expanded into an international logistics company. When starting out, it first outsourced its call center. However, DHL, after its expansion and being bought over by Deutsche Post, realized it has the scale to create its own call center arm, so it went to a standalone call centre services. After years of expansion, it realized it was efficient enough to offer this services to other companies who want their call center service, thus providing outsourced call centres.

Amazon and other e commerce companies such as Alibaba are following this evolution path. Start small, work with contractors and when sufficiently large, realize it is more cost effective to do it in house. Hence they setup their own arm, develop/efficiency it until it can do better than the current incumbents in the industry and become a competitor .

If Amazon develops its own logistics center, who knows it may become proficient enough to become an industrial property developer and then have its own construction arm who can tap on Amazon's own logistic arm to move building materials. I guess this was how Korean Conglomerates developed as well

[weijian]

Big is only going to get bigger.

Amazon is buying iRobot for $1.7B

A decade after its acquisition of Kiva, Amazon Robotics is almost universally recognized as the warehouse and fulfillment robotics space amid a pandemic-fueled boom. Can its purchase of iRobot do the same for the home?

https://techcrunch.com/2022/08/05/amazon...-for-1-7b/

[Behappyalways]

Did Amazon Buy iRobot To Map Inside Your Home?
https://www.zerohedge.com/technology/pur...-your-home

[Bibi]

if those pp r so paranoid, they can just don buy or roomba at night.

[CY09]

https://www.cnbc.com/2022/08/30/facebook...-down.html

In a sign of how entrenched Amazon is in our lives.

Buy Groceries... Amazon
Casual Gaming online and Streaming... Amazon
Companies using API to expand their services worldwide... Amazon

It really shows how the company has moved from a one product wonder (which is low margin) into many other realms. Its similar to what alphabet did in its transformation.

Meta is facing difficulty defeating the incumbent in the casual gaming and streaming space

[weijian]

It is unfortunate because Amazon is known for "throwing a lot of things onto the wall and seeing what sticks".

Amazon plans largest-ever layoffs, targeting devices, retail, HR

In recent weeks, Jassy has sharpened his focus on finding cuts among experimental and unprofitable businesses. The company shuttered teams working on a telehealth service, a delivery robot and a kids’ video-calling device, among other projects.

https://www.businesstimes.com.sg/consume...-retail-hr

[Wildreamz]

It is unfortunate because Amazon is known for "throwing a lot of things onto the wall and seeing what sticks".

Amazon plans largest-ever layoffs, targeting devices, retail, HR

..

It is also fortunate for shareholders, because it also implies that a lot of Amazon's current workforce, my not be critical to day-to-day operations. 

This will help improve operating margins. Hence, Amazon shares rallied in reaction to this news.