Amazon Down 11-12%

Discussion in 'Stock Market Forum' started by Kate, Jul 25, 2014.

  1. Kate

    Kate Senior Investor

    Joined:
    Apr 2014
    Posts:
    515
    Likes Received:
    5
    Okay, granted it's just 9:30 here on the east coast, and the market just opened, but I wanted to watch Amazon after something I heard yesterday.

    It started down 12% this morning and now it's fluctuating between 11 and 12% down (more than $40 a share.)

    Do you think it will climb today? And do you believe what I heard yesterday, that their big loss for the quarter is because of the experimental stuff they are spending a lot of money on (i.e. the now infamous drones) and not because of diminishing sales at all?
     
  2. ReinbachThe3rd

    ReinbachThe3rd Active Member

    Joined:
    Jul 2014
    Posts:
    43
    Likes Received:
    0
    From general paging around it looks like most tech stocks are getting hit right now. Google is down and they do a lot of experimental stuff so I'm not going to pin that fault on Amazon. I'm going to go with sales for the most part. Maybe a bit of the drone program but I don't think that has a huge of an impact here.
     
  3. Kate

    Kate Senior Investor

    Joined:
    Apr 2014
    Posts:
    515
    Likes Received:
    5
    Places like International Business Times are reporting that the losses are because investors are getting tired of the losses. Some analysts are saying that those losses are not entirely connected with sales, but the experimental things they're pushing so hard.
     
  4. caparica007

    caparica007 Well-Known Member

    Joined:
    Jul 2014
    Posts:
    90
    Likes Received:
    0
    I am surprise that a huge company like Amazon keeps having losses, why does this happen? I believe their margins are so low that they can make a decent profit, can this be the case?
     
  5. Kate

    Kate Senior Investor

    Joined:
    Apr 2014
    Posts:
    515
    Likes Received:
    5
    I'm still following this. I knew that writers were very upset with Amazon because of the Hachette issue. But the second quarter losses are almost twice as bad as Wall Street thought they would be. Expectations for third quarter are supposed to be even worse.

    So the big question... anyone here investing in Amazon? And if so, do you plan to make any changes?
     
  6. Strykstar

    Strykstar Well-Known Member

    Joined:
    Apr 2014
    Posts:
    370
    Likes Received:
    1
    Does anyone know what's the reason for such a fluctuation? I've been checking the news but I don't see anything...
    It could be a fantastic opportunity to get on board but it can also be a bit dangerous.
     
  7. ReinbachThe3rd

    ReinbachThe3rd Active Member

    Joined:
    Jul 2014
    Posts:
    43
    Likes Received:
    0
    I own stocks in Amazon and I'll probably hang onto them. My grandpa bought them when they were in the pits around 2000 and it's going to take a LOT more for me to want to sell them. They're still everywhere and they still have a good clean business. Bezos sometimes makes bizarre decisions and is very controlling but he'll find a way to pull out of it. Razor-thin margins are to be expected when you're trying to be cutthroat like he is.
     
  8. richc3

    richc3 Senior Investor

    Joined:
    Jun 2014
    Posts:
    98
    Likes Received:
    0
    I almost feel like Amazon isn't trying to make much of a profit (yet). Instead they're hyper focused on growth and essentially starving the competition.
    Whenever they switch gears and do some simple cost cutting measures, seems like this stock could just reach the moon. I doubt that will happen in the short term and seems like quite a few years down the road.

    All in all, long term = fantastic stock, short term = questionable.
     
  9. turt

    turt Guest

    Joined:
    May 2014
    Posts:
    282
    Likes Received:
    1
    Their sales are through the roof, they are just using all of the revenue they gain to move into as many as markets as possible. It makes a lot of sense, once they invest in the market, they knock out a lot of competition and in turn, can make major profits after the investment period. Look what they've done to book stores already. Although, I question some of the things they've done like the smartphone. It just doesn't look like something many people would buy.
     
  10. troutski

    troutski Guest

    Joined:
    Jul 2014
    Posts:
    256
    Likes Received:
    1
    The reason investors are souring on Amazon are easy to figure out, quite easy in fact. For starters, the company is wasting its money on a smartphone that was guaranteed to fail because gimmick phones don't sell. Consumers want the full package: great battery life, great performance, quality design, etc. The drones thing was and is stupid, but that's not a huge issue because companies experiment with ideas all the time.

    Amazon is taking a dive because the company posts ridiculously high revenues, but hasn't and isn't close to figuring out a way to post actual profits. The company barely profits from its endeavors because shipping items, especially through the Prime program, often results in a loss or a barely breakeven scenario. Digital goods help the company offset these costs, but that's not making a huge dent in the lack of profits. Amazon has tons of money and offers a beloved service, but the company isn't profitable, especially compared to its stock price.

    Even long-term, Amazon is a question mark because it needs to figure out how to profit. You know who profits when it comes to high-volume shipping? The shipping companies.
     

Share This Page