They still have a chokehold on other markets so I wouldn't exactly count them out. Sure they're having problems now but they'll right the ship around. Amazon's been kicking for a long time now, they know how things work. Their profits are usually bad due to reinvesting instead of paying out dividends. I will agree prime can be an issue but I believe that's more of a loss leader than anything. If I get free shipping, I'm definitely more tempted to buy stuff or get over a certain dollar amount to gain free shipping.
It's a purely speculative investment at this point at these levels. I've posted before that I have a small longterm speculative long position, but it's so small because they're so expensive at this point - I've also kept puts on it. I was able to realize a profit on the put here, but I'll hold off on adding to my long position after this selloff. In fact, I'll take out another put position. They've been in this cycle of little or no earnings (even losses) on high revenues for a while now. I'll keep this small speculative long position with puts to protect future downside. Bottom line, if you have limited funds I'd invest elsewhere. If you are more conservative I'd invest elsewhere. If you have plenty of money and want to use a few bucks for speculation, I see this as a good one for that sort of thing. But I'd be wary of an actual short stock position on such a volatile stock - puts would be better for downside speculation, and would also be a good idea to protect a relatively small long stock position.
Amazon on a downfall? That's really weird tbh. They are such a big and successful company. I believe the tides will turn in their favor in the end though.
It may make a lot of sense in many types of companies... but I can't help thinking that if you're at the top in your type of business and see that spreading out too much is causing your investors to get nervous and maybe even pull out lowering your stock significantly, I'd think I'd do some fast re-evaluation. A quarter or two I'd expect, but if it's continual, it's time to wonder what I'm doing wrong.
I would have definitely predicted an earnings surge. Which is why I don't do earnings plays . However, like FB, I think AMZN will re-trace back to it's earlier highs. And, it had eclipsed 400. So, this is actually a great time to buy. Remember, FB hit 71 dropped to the 50's and just this past week blew through 71 again. It took several months. I can see AMZN hitting 400 within the next 3 months. Four months tops. Then, come November, I see a big overall sell off which of course would hit AMZN...hard!
"I own stocks in Amazon and I'll probably hang onto them. My grandpa bought them when they were in the pits around 2000" What is your current cost basis and did you ever try writing calls against the stocks. I know that could backfire if the stock surges, but I would suggest writing weekly call options at a significant strike above the trading price. And, only after 3-4 up days in a row. I've noticed that AMZN rarely goes up more than 4 days in a row. But, because of it's high underlying volatility, even the way out-of-the-money weekly options can net you some nice additional premium!
"They still have a chokehold on other markets so I wouldn't exactly count them out." No one is counting AMZN out. But, the Fire did not receive the kind of reviews it was hoping for. The WSJ actually savaged the phone pretty decisively. Plus, with Alibaba coming in as a huge hitter with tons of cash from their impending IPO, anyone in the e-commerce space should be shaking a little in their bridges. Chinese companies don't necessarily play by the same rules as American firms. We know that Chinese auto manufacturers are able to compete with US companies in Mainland China. We also know that Foxcom and other Chinese firms make significant chunks of American labeled hardware and have subsequently become major players of their own. But, this will be the first time an organically Chinese company goes head to head with American firms like AMZN and EBAY. And, quite frankly, no one knows what to expect...
So, there expansion into other markets is causing the fall in stock prices? That doesn't make sense to me. Are investors thinking they're spreading themselves too thin and don't want to wait for the growth to happen. You'd think expansion would be beneficial to the long-term projections of Amazon right?
It's all about profits...Jeff Bezos is spending a lot of money and not bringing in as much profitable business as investors want. There are razor thin margins in the business Amazon is in.
It's still expensive on paper. And I have no idea where it will be in 3-6 months - no more than I knew ahead of time whether or not the earnings call would be good or bad. If I could be anywhere near certain of these things, I'd also give you tonight's mega millions numbers. Just to clarify, for the small investors / beginners reading the board, I wouldn't mess with puts or calls if you're new to the game or have less than 6 figures to play around with. They cost money and are more of an advanced technique.
