<Off topic?>
What's even more concerning is that Amazon.com doesn't have
to be making money in order to force others out of business. The
independents point to Amazon.com, but it is this rabid bull that is
the culprit. I work in Palo Alto (the city in the story in your link), and
certainly many of us here do buy books online. But for only one reason - it's typically
30% cheaper or more. That's obviously below Amazon.com's profit
margin. Scale? Well, Amazon.com loses more money the more it sells.
And given its model, you have to wonder where the efficiencies will come
in to change this situation, since it is already so efficent that it doesn't have
to carry inventory. So you have a business that can print capital by issuing stock
to insane investors to support its horrid bottom line, and it is putting out of
business perfectly good businesses operating on the funny theory that you
have to cover your costs with your revenues. Of course, Amazon's
game cannot be kept up indefinitely. Something has to give. Even
the analyst that gave it a $400 price target said that it takes a lot of
faith to believe that Amazon.com will be profitable in the next 5 years
, if ever. Those are his words I emboldened.
CW, it's an interesting topic, so I started a thread for it --
Subject 24530
Good investing,
Mike |
