I have no predictions on what will happen with AMZN stock tomorrow or in the days that follow. As I have posted earlier today, I am short AMZN at the moment. I know many people on this thread are long - so I won't go on and on about why I think the earnings report is a mediocre one at best. The main points that jump out at me are as follows:
1. They are on track with their projections - they actually beat their revenue estimates by about $2 million, and added 400,000 more customers than expected (Marketwatch reported today that revenues would be $312 - they came in at $314; and that new customers would be 1.9 million - they came in at 2.3 million).
2. While the report states that 2.3 million new customers have been added - the report also states that 70 percent of the orders for the quarter were from repeat customers. I don't know how to view this, as the report does not say how this translates to revenue (does 70 percent of orders equate to 70 percent of revenue?). Nor does the report state what an order actually is (does a winning auction bid represent an order?).
3. Bezo's states: "We're especially pleased that Amazon.com Auctions is our fastest growing business." I think they will still have difficulty in wrestling away the market from EBAY. I think it would have been more encouraging to see one of their retail businesses as their fastest growing.
4. Bezo's also states: "And looking at the first few days of sales in our new toys and electronics stores, we're shocked and grateful. In fact, we believe we're already the #1 seller of children's products online." I view this as a rather weak statement. In short, where's the data? I cannot imagine Microsoft coming out and saying "We think we are the #1 seller of spreadsheets," without having any data to back it up.
5. Bezo's also states: "For the rest of 1999, we expect to invest more heavily than we have in the past. Our goal remains to build the world's most customer-centric company." As I have stated in previous posts, I think Amazon is spreading itself too thin. I would interpret Bezo's statement to mean that he is still not that concerned about profits. This worries me.
6. I have no idea why they chose to split their stock at this point in time.
Anyway - those are my views - and people should keep in mind that they are biased due to the fact that I am currently short AMZN. Would be great to hear the views of others. With my luck, the stock will gap up 10 tomorrow, and I will lose on my short.
Thanks,
-Eric |
