Woooooooo! I might start parroting this stock instead of AAPL.

Jesus… Bezos gained approximately $7 billion in after hours. Kicking myself for not buying at the beginning of the year. DOH!

Time to short? In the olden days I could probably walk all the way to the broker over the corpses of the shorts who jumped to their deaths today :slight_smile:

I don’t get the love affair of the street with AMZN. Do you?

So these guys have this crazy valuation of like 250-500X for years, even though they don’t make money and admit they don’t care about making money (hard to calc P/E when earnings are negative). Now they finally make a little money…so they are catching up to the valuation…and instead the valuation goes even higher! LOL, mmmk.

“Shares in Amazon jumped as much as 19 percent after it reported net income was $92 million.”

Meanwhile, AAPL made $10,000 million, they do so consistently, and their shares got punished. What is this weird love affair with AMZN?

I will let you plebeians on a little secret. AMZN is a profitable company that generates ridiculous growth and returns on capital. The key is understanding where to look for that profitability. It is not in the income statement, but in the cash flow statement.

You’re welcome.

My cost basis: $320, also it is 15% of my portfolio.

Yeah, I think we understand that.

But let’s see them try to move it from CF to the IS long-term, that’s when things get tough.

^i dont think thats a secret


But why would they move it? It is economically the same thing, but you have to pay taxes on that net income. Plus when you’re growing at insane rates, you should be reinvesting all you can into the business.

Meh, I would use “business” in quotes when talking about Amazon.

AMZN has one of the widest moats of any business. The user base on Prime continues to grow and you can’t just go out and replicate the logistics network they have created. They are tied to so many positive secular trends, have such a competitive advantage due to scale efficiency and network that I don’t see how the business would not be profitable as soon as they want it to be.

lol yea. amazon is a pos clouded with a spectacular moat, and the moat is that investors are retarded and pay up a multiple based on 2x revenue per sahre. what that means is they dont ahve to be profitable, they can spend heavily on capex to reduce cost and be the low cost dude, gain market share be reducing prices and putting the middle finger to their competitors, they have the ability to burn money on innovative useless projects like the amazin phone until they become dominant? if ceteris paribus were to apply. amazon would be back to its pos state. that being said i am a very happy consumer and i juss applied for their prime credit card wit 5% cash back. i am big on their cheap shit.

What do you think of this new competitor Palantir? Seems it may reduce their users, but increase the avg profitability of retail users.

Each item on Jet is compared to the price on Amazon, to show they are cheaper.

The only company on the planet today that can easily post 20%+ revenue growth YOY for the next 20 years.

If you guys think AMZN is a pos, by all means, short the thing. Ian just enjoying the ride…

i love amzn

How much of AMZN’s cash flow is from options being exercised? (Not a rhetorical question, I don’t know how to correlate their share dilution to how many options were exercised - that would depend on the prevailing price at the time of exercise and their stock price has been quite variable recently - though always going up.)

Bottom line, I’d like to know the FCF after subtracting a “proper” amount of cash from the cash flow, with “proper” based on share dilution.

ADDED: The reason I care is because it’s a non-negligible number. IIRC they added 8 million shares last year. At an average price of $400 that would be $3.2 billion in cash flow. But maybe we should count less (or more)?

I’m not 100% sure about that, it’s been a while since I’ve looked closely at the stock. One thing to keep in mind is that their options expense is expensed up front while it is not really vested as many of their employees don’t stay around to vest etc.

Anyways, how would options being exercised affect cash flow? It is a noncash transaction right?

Amazon Fresh. Could absolutely disrupt the entire grocery chain and bankrupt most grocers. It’s a $600B market that is basically untouched, waiting to be disrupted. Dominating groceries would further reinforce its other offerings. This will be AMZN’s major transformation over the next 5-10 years. Expect well above 20% revenue growth after rolling out grocery nation/continent-wide, but obviously at much lower margin as it works to undercut all other grocers. Once the other grocers are all dead, it can raise prices; same goes for non-grocery. This is why AMZN trades where it trades. Why invest in any retail stock when that retail stock is most likely to be bankrupt in the next couple of decades when you can buy the company that will do the bankrupting?

You really want to test my pathetic FSA skills eh. OK fine smiley Why not read instead?

IIRC options exercise shows up as a positive adjustment to net income because companies have to show it as an expense in the income statement. What I don’t remember is if it shows up as an operational cash flow (thereby overstating CFO and FCF) or investing cash flow. I am almost sure it is operational (because originally it was subtracted as part of employee-related SG&A expenses.)

Bottomline, like depreciation which is also non-cash, options exercise increases CFO/CFI because of indirect method of deriving the cash flow statement from the income statement.