71–80 of 147 posts
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I don't understand why companies don't just let there stock price fall. This makes no material difference to the operating of the company, right?
Rising stock price is helpful for retaining high value employees that are compensated with stock
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Rising stock price is helpful for retaining high value employees that are compensated with stock
I guess. You could just pay them more though.
This is a good idea. Stop the stock game and just pay a set base salary = to comp + stock.
But we can’t do that because that would take all the fun out of seeing part of your potential income fluctuate with the whims and buffoonery of Wall Street.
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Yes, but now look at their growth as well and you'll understand Amazon's valuation is not wholly out of line.
> Yes, but now look at their growth as well and you'll understand Amazon's valuation is not wholly out of line. Then please lay out your understanding of what justifies AMZN's price in your eyes as you've yet to quote a single figure. The only reason why WMT's P/E is so high (and their Market Cap doubled in since 2016) is because of their success in their e-commerce business which saw 37% growth YoY. You've been sayi…
As for producing the numbers on the YoY for the retail companies you listed - I hope somebody else does that. I'm busy.
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Market cap is just the number of outstanding shares * price.. It says nothing about the quality of the business. Your explanation doesn’t make sense in that regard. Even now, looking at the results, Amazon retail is not a great profitable business. It’s still low margin. No one could have predicted AWS - the true success story. And look no further than YC backed companies. Have any of them become profitable? Even the…
OP meant total addressable market (TAM).
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That's not true. Road to profitability and market cap are what matter. Hypothetical: One business is making $100million in revenue, is losing $20million a year but has enough market cap to grow 10-100x and is spending most of its money on R&D/marketing, while a second business makes $1million in profit on $10million in revenue, but you've maxed out your growth and there's no more market cap, I'd rather be business 1,…
Market cap is just the number of outstanding shares * price.. It says nothing about the quality of the business. Your explanation doesn’t make sense in that regard. Even now, looking at the results, Amazon retail is not a great profitable business. It’s still low margin. No one could have predicted AWS - the true success story. And look no further than YC backed companies. Have any of them become profitable? Even the…
Further more, even if amazon retail still isn't profitable (I haven't checked the numbers) AWS still wouldn't have spawned without it. Think of it as a pivot, even though they still kept amazon retail.
I'm not really sure what your YC comment has to do with things.
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> Yes, but now look at their growth as well and you'll understand Amazon's valuation is not wholly out of line. Then please lay out your understanding of what justifies AMZN's price in your eyes as you've yet to quote a single figure. The only reason why WMT's P/E is so high (and their Market Cap doubled in since 2016) is because of their success in their e-commerce business which saw 37% growth YoY. You've been sayi…
It's not untrue, Amazon is largely a retail business and you can't compare it's P/E to tech socks, that'd just be silly. You clearly know enough to know that, so I don't get why you insist. As for producing the numbers on the YoY for the retail companies you listed - I hope somebody else does that. I'm busy.
Two interesting points: 1) Close to 70% of Amazon operating income once again can be attributed to AWS. Consolidated operating income: $3,084 m AWS operating income: $2,121 m 2) AWS revenue was $8.3B for the quarter, 37% more than the same quarter last year.
The interesting number you left out was the non-AWS revenue, which in 2018 (too lazy to correlate with today's announcement) was $230B, literally 30x higher. AWS is a tiny drop in the bucket, no matter what the profit details say.
Which then prompts the question of why AWS gets that kind of margin, when it would seem like a pretty commoditized field at this point. Linux VMs are an open and very portable deployment platform. You can get them from any number of top tier providers and a huge horde of little ones. You'd expect to see a ton of competition driving prices down, but we don't. I genuinely don't know why.
Two interesting points: 1) Close to 70% of Amazon operating income once again can be attributed to AWS. Consolidated operating income: $3,084 m AWS operating income: $2,121 m 2) AWS revenue was $8.3B for the quarter, 37% more than the same quarter last year.
What's interesting isn't the fact that they "make" more from AWS, it's that AWS gets premium margins where their store is running right at cost (and has been, basically forever -- it's their thing, sorta). The interesting number you left out was the non-AWS revenue, which in 2018 (too lazy to correlate with today's announcement) was $230B , literally 30x higher. AWS is a tiny drop in the bucket, no matter what the pr…
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They're not a Startup, they've been "going for growth" for a 1/4 of a century, eventually you need to make a profit to justify your Market Cap. Just because profit isn't a goal for AMZN doesn't mean it's not a vital financial metric.
I don't understand why companies don't just let there stock price fall. This makes no material difference to the operating of the company, right?
It does help with M&A, raising capital, employee stock options + bonuses.
It's rare, but sometimes you'll hear company Investors saying that their stock price is too high, like Zoom's CEO [1].
[1] https://www.bloomberg.com/news/articles/2019-04-18/zoom-vide...
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Market cap is just the number of outstanding shares * price.. It says nothing about the quality of the business. Your explanation doesn’t make sense in that regard. Even now, looking at the results, Amazon retail is not a great profitable business. It’s still low margin. No one could have predicted AWS - the true success story. And look no further than YC backed companies. Have any of them become profitable? Even the…
Yes I meant TAM as the other person commented. Further more, even if amazon retail still isn't profitable (I haven't checked the numbers) AWS still wouldn't have spawned without it. Think of it as a pivot, even though they still kept amazon retail. I'm not really sure what your YC comment has to do with things.