I would never invest in a company like this. When I checked on the link in the article, Amazon's stock price was $326/share. And for your $326 investment, each year you get.....to lose another $.23. I understand that people who are buying this stock now are expecting Amazon to be a major presence everywhere in the future -- the article mentions electronics, film/TV, fashion, hardware, luxury consumer goods -- but with its incredibly high price, its low margin (.2%!), and its negative earnings, I'm hard-pressed to see how an investor would ever earn anything on paying this much for Amazon's stock. Apple is another stock I think is similarly overvalued.
I also question the business model here. I understand the business technique of investing profits in making a business grow, but how can one company simultaneously grow in fashion, electronics, film production and discount marketing and manage all these areas well? When Bezos says, "The market is effectively limitless," I worry that Amazon is running in so many directions that it won't be able to be effective at anything. (Agreement)
Comments, anybody?
Roger
I hate the stock market... specially with this kind of low margin.
ReplyDeleteFaisal 1
ReplyDeleteI think the strategy that Amazon is using is smart. It is true that Amazon is making really small amount of margin, but it is true that they are gaining commercial supremacy in the online market. As a customer, monopoly is not good, but it is smart and different idea as a online shopping mall. It is clear that they are not making a lot of profits and it means for investigating, amazon is not a good company. This strategy is a double-edge sword, so they should find the exact point to satisfy their investigators, and their goal.
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