Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Warren Buffett dumps $1.7B of Amazon stock

finbold.com

Post reply on HN
Print view View original

81–90 of 190 posts

Re: Warren Buffett dumps $1.7B of Amazon stock

#81

Post by pgwhalen »

whatever1 wrote: post #73

There is only so much cash a company can burn. Amazon spent last year 100B in Capex. They announced they will spend 200B this year. These numbers are INSANE. Greater than GDPs of entire countries. They literally don't have the cash to do it. Either they need to grow their cash flow significantly, or deplete their cash reserves or take a huge loan (likely a combination of them). Jassy is playing Russian roulette with…

> They literally don’t have the cash to do it.

I don’t understand this? Amazon is a profitable company, on the scale of tens of billions of dollars per quarter. They very literally do have the cash.

Am I missing some subtlety in their financial reporting?

Re: Warren Buffett dumps $1.7B of Amazon stock

#82

Post by Ekaros »

whatever1 wrote: post #73

There is only so much cash a company can burn. Amazon spent last year 100B in Capex. They announced they will spend 200B this year. These numbers are INSANE. Greater than GDPs of entire countries. They literally don't have the cash to do it. Either they need to grow their cash flow significantly, or deplete their cash reserves or take a huge loan (likely a combination of them). Jassy is playing Russian roulette with…

Just considering alternatives on that sort of numbers. Billions just letting that money sit. And if you want more than that and actually to pay it back in say 10 or 20 years... Which I question with some capex stuff going around... It just doesn't make sense for my poor engineering brain.

Re: Warren Buffett dumps $1.7B of Amazon stock

#83

Post by agentcoops »

legitster wrote: post #45
Aurornis wrote: post #31

Earlier quoted context omitted.

> Amazon's core business does not make sense. Despite being so massive, their retail operation makes almost no money. Net profit margins for retail are only around 3% across the industry. Amazon isn't actually doing anything unusual in that regard. Retail is just a very low profit margin business whether it's physical or online. These numbers are always confusing to those of us in the tech world where SaaS net profit…

This is correct, but it doesn't explain why Amazon would have a 2x market cap over Walmart when they both roughly make the same revenue. You have to believe that Amazon is poised for much higher growth than they are to justify their current stock price.

Amazon's free cash flow rises year over year (apart from the post-COVID period) [0] while Walmart's doesn't [1] and price multiples are largely determined by expected FCF over time not directly revenue/EBITDA. FCF rain or shine maps roughly onto possibility of paying out dividends/buybacks, which determines the value of an equity in capital markets ("discounted present value of a company's future cash flows").

[0] https://www.macrotrends.net/stocks/charts/AMZN/amazon/free-c... [1] https://www.macrotrends.net/stocks/charts/WMT/walmart/free-c...

Re: Warren Buffett dumps $1.7B of Amazon stock

#84

Post by wenc »

xvxvx wrote: post #2

Maybe the novelty of Amazon has worn off. I occasionally purchase from their UK site, and it’s filled with tricks to get me to sign up for Prime upon checkout. Really horrible workflow and design decisions, cheapening the experience. I now see similar changes to the US version: ‘you saved $15 in shipping by being a Prime member with this purchase’ and ‘last year you made 211 sustainable product purchases’. Guys, quit…

I have two Alexas but never get ads.

How is it that you’re getting ads?

Re: Warren Buffett dumps $1.7B of Amazon stock

#85

Post by MrDarcy »

pgwhalen wrote: post #81
whatever1 wrote: post #73

There is only so much cash a company can burn. Amazon spent last year 100B in Capex. They announced they will spend 200B this year. These numbers are INSANE. Greater than GDPs of entire countries. They literally don't have the cash to do it. Either they need to grow their cash flow significantly, or deplete their cash reserves or take a huge loan (likely a combination of them). Jassy is playing Russian roulette with…

> They literally don’t have the cash to do it. I don’t understand this? Amazon is a profitable company, on the scale of tens of billions of dollars per quarter. They very literally do have the cash. Am I missing some subtlety in their financial reporting?

They have 86.8 B cash but are going to spend 200 B this year.

Re: Warren Buffett dumps $1.7B of Amazon stock

#86

Post by ilamont »

My view of Amazon's decline comes from being a "partner" in their seller and publisher ecosystems for years.

The seller platforms in particular (Brand Registry, Vendor Central, Seller Central, Transparency, etc.) have crippling levels of technical debt. The situation has only gotten worse with Jassy's reckless directive for the entire organization to push into Generative AI (https://www.aboutamazon.com/news/company-news/amazon-ceo-and...). So much basic stuff is just breaking down, and seller support is overwhelmed or unable to intervene to fix the mess.

You can see a small sample here involving problems with product attributes (https://sellercentral.amazon.com/seller-forums/discussions?s...). Google "Amazon AWD delays" or "Amazon CSBA problems" or "Amazon remote fulfillment problems" to see examples of programs that are unable to provide even basic levels of the services promised to sellers.

Meanwhile, Amazon has been so greedy with fees since Jassy took over that sellers of all sizes and many small to midsized brands are being squeezed out of existence or driven off Amazon. Its PPC ad platform is completely predatory, loaded with dark patterns and hidden defaults that add billions to top-line revenue while strip-mining the accounts of sellers who often have no choice but to participate in the auctions.

It's clear that Amazon is running scared when it comes to dealing with new competition, including the Chinese shopping sites and the looming prospect of agentic AI and other new AI-powered shopping tools eating its lunch. For the first time ever last month, I saw an Amazon search results (via Rufus) that actually directed shoppers to third-party brand sites. This would have been heresy 5 years ago.

Re: Warren Buffett dumps $1.7B of Amazon stock

#87

Post by GorbachevyChase »

xvxvx wrote: post #2

Maybe the novelty of Amazon has worn off. I occasionally purchase from their UK site, and it’s filled with tricks to get me to sign up for Prime upon checkout. Really horrible workflow and design decisions, cheapening the experience. I now see similar changes to the US version: ‘you saved $15 in shipping by being a Prime member with this purchase’ and ‘last year you made 211 sustainable product purchases’. Guys, quit…

Amazon is Walmart for progressives.

Re: Warren Buffett dumps $1.7B of Amazon stock

#88

Post by awesome_dude »

pgwhalen wrote: post #81
whatever1 wrote: post #73

There is only so much cash a company can burn. Amazon spent last year 100B in Capex. They announced they will spend 200B this year. These numbers are INSANE. Greater than GDPs of entire countries. They literally don't have the cash to do it. Either they need to grow their cash flow significantly, or deplete their cash reserves or take a huge loan (likely a combination of them). Jassy is playing Russian roulette with…

> They literally don’t have the cash to do it. I don’t understand this? Amazon is a profitable company, on the scale of tens of billions of dollars per quarter. They very literally do have the cash. Am I missing some subtlety in their financial reporting?

Yeah, a quick Google tells me that Amazon is holding 123 Billion in cash and marketable securities

Re: Warren Buffett dumps $1.7B of Amazon stock

#90

Post by JMKH42 »

The purchasing experience when you buy direct from companies now is usually much easier than it was years ago. A lot of people instinctively turn to Amazon because its one click and stuff is on its way, but with the new payment integrations even small companies have a pretty close to 1 click experience as well. So when I think of buying something on Amazon I always check the actual brands website first now, because I don't want to support Amazon at all or force sellers to eat the overhead.
Post reply on HN