131–140 of 147 posts
Earlier quoted context omitted.
This is absolutely true, sure, but the UX is dreadful. If someone like, say, DigitalOcean who has nice design spent the money to actually compete, I'd move in a heartbeat. Google is a nonstarter, and Azure is a 'maybe'. Most people use a few key services. Everytime I log in, I'm slammed with 200 tiny hyperlinks.
Just curious, why is Google a nonstarter?
Earlier quoted context omitted.
AWS is basically "run your entire company's engineering as a service" now, and they've done a good job at it. It's not at all easy to compete with such an integrated and battle-tested platform (other than on cost; AWS can be pretty expensive).
This is absolutely true, sure, but the UX is dreadful. If someone like, say, DigitalOcean who has nice design spent the money to actually compete, I'd move in a heartbeat. Google is a nonstarter, and Azure is a 'maybe'. Most people use a few key services. Everytime I log in, I'm slammed with 200 tiny hyperlinks.
Never underestimate the power of good aesthetics and design.
Earlier quoted context omitted.
What about uncertainty? Surely the removal of uncertainty would cause a movement in the price even when a company performs exactly as predicted?
No. Imagine a coin flip where you earn $1.1 on head and lose $1 on tail. What is the value of such a flip? $0.05 Now I offer you a coin flip with less uncertainty. It earns you $0.6 on head and loses you $0.5 on tail. Would you pay more then $0.05 for it? No. Uncertainty was reduced, but no value was created.
A second game also costs $10k to enter, but the (50/50) payouts are $9k and $13k.
Do you find then equally attractive? Most people wouldn’t.
If you do, what if you could instead “play” a game where you pay $10,000 and get $10,999 straight away? It’s a worse proposition if you’re risk-neutral, isn’t it?
Earlier quoted context omitted.
This is an important point. The stock market doesn't try to reward companies with higher share prices, it tries to find the correct price and stabilize there. If your company is expected to do well, that performance is already built into your stock price. Doing exactly as well as expected, even if you've doubled your profits, won't cause your share prices to change at all. Because everyone already expected you to do…
What about uncertainty? Surely the removal of uncertainty would cause a movement in the price even when a company performs exactly as predicted?
Earlier quoted context omitted.
AWS accounts for their largest profits, growth and margins, their financials would be even worse if you compared them against retail stocks which are high capital intensive and low margin businesses, there's no way AMZN is valued as a retailer which would make their valuation even more insane.
Amazon is valued based on the implicit assumption that Bezos is a Buffet tier investing genius. So far, that assumption has held. The main difference is that Bezos invents new businesses in addition to buying them. Nobody is arguing that retail isn't a big part of their business, but it was only ever meant to be the bootstrap. It's incredibly rare to see such executive and entrepreneurial skill combined in the same i…
Earlier quoted context omitted.
No. Imagine a coin flip where you earn $1.1 on head and lose $1 on tail. What is the value of such a flip? $0.05 Now I offer you a coin flip with less uncertainty. It earns you $0.6 on head and loses you $0.5 on tail. Would you pay more then $0.05 for it? No. Uncertainty was reduced, but no value was created.
Say you can pay $10k and get (50/50) either $0 or $22k. The expected gain is $1k. A second game also costs $10k to enter, but the (50/50) payouts are $9k and $13k. Do you find then equally attractive? Most people wouldn’t. If you do, what if you could instead “play” a game where you pay $10,000 and get $10,999 straight away? It’s a worse proposition if you’re risk-neutral, isn’t it?
Earlier quoted context omitted.
They would pay a premium to avoid uncertainty, so they wouldn't accept that offer either. The uncertainty is the same whether you sell or buy the flips. I don't know you, but I guess you wouldn't pay $499K for a $1M/$0 flip, and you wouldn't sell such a flip for $499K either. This is the same phenomenon on a much smaller scale.
I guess you wouldn't pay $499K for a $1M/$0 flip No. But the discussion here is about shares. And they are not $499k a piece. We are discussing if the share price of a company that publishes numbers in line with expectations should go up.
If by expectations we mean the numbers published by sell-side analysts they may or may not be close to the actual market expectations.
Proof I have no idea how the stock market works: “Wow, that’s insane, their stock must have popped back over 2k because of this news!” checks ticker “Down 2.5% after hours...?”
> For a company with sales of $233bn last year, Amazon makes surprisingly little profit. That's because the bulk of sales come from the retail business, which generates a comparatively modest profit margin. In fact outside the US, Amazon's retail business loses money.
Earlier quoted context omitted.
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?
Shareholders own companies and a rising stock price benefits shareholders who elect the board members that run said company, a falling stock price isn't in anyone's interest who are invested in the company. 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.bloo…
Earlier quoted context omitted.
Shareholders own companies and a rising stock price benefits shareholders who elect the board members that run said company, a falling stock price isn't in anyone's interest who are invested in the company. 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.bloo…
Good point. This is why we need to reduce the amount of control shareholders have over company boards!