Glenn, just to jump in here on my favorite thread, there's a vague parallel you probably won't agree with:Microsoft. They failed, and typically still fail miserably, at their intended projects, but are able to get more capital and keep going, originally due to the single IBM contract in 1977, then due to investors' discovery of the PC market, and various shall we say "aggressive" practices thereafter. None of this huge amount of capital had anything to do with building world-class software. It was a coincidence.
AMZN ain't no MSFT but MSFT ain't what people thought it was either. It remains to be seen if the kiretsu + Bezos can pull off a profitable business model from the incredible amount of financial engineering. Somehow you have to separate the financial engineering from the business model du jour.
Next week should show the direction of valuations near-term. What optimistic investors have looked at is top-line growth with the theory that whatever profits are made, the greater the volume, the greater the eventual profits. Perhaps, but IMO it's still the BAttle of the Business MOdels. Since AMZN can be flexible, maybe they'll figure it out.
For the record, no AMZN in my port |
