your comment is at best a gross exaggeration. They are making money, but they are re-investing that money at a crazy rate into new businesses. That represents a huge bet, which their shareholders are willing to take on. The alternative would be to pay out cashflow from operations to shareholders in the form of dividends, or grow slower. But look at the stock price over the last 5 years - clearly, investors want to take on the bet

Makes me think of Peter Thiel's line: "we like to invest in businesses that aren't making a profit, because they know what to do with their money". Businesses that are paying back profits via dividends/buybacks are communicating that they have more money than they know what to do with (at least Thiel would say so).

Some business are simply motivated by profit rather than making headlines with mercurial statements on TechCrunch.

Considering Thiel's net worth of 1.5billion, I imagine he's motivated by making a profit as well.

Curious about the downvote. "spin it any way you want but they are not making money" is incorrect.

I too am curios about the down voting, but this site is sometimes so polarized, or stifling with political correctness it's nauseating.

Jeff Bezos can do no wrong in this market place; that is where we have a somewhat growing marketplace for certain professions. Professions that provide a livable wage, with a few dollars left over after rent in order to spend on Amazon.

Besides Jeff's vanity projects(newspaper, drones, I don't fell like doing a bunch of research)--his business model has one glaring flaw. He needs cheap gas. There is good reason why have huge trucks that move a large amount of goods from one location to a more convenient location. Don't get me wrong I like Amazon. I am surprised he hasen't bought up some of the dirt cheap commercial Realestate and put in Amazon retail outlets. Outlets that just provide a place where customers could pick up their packages. Hell--he could automate them, and they could be open 27/7?

> Outlets that just provide a place where customers could pick up their packages. Hell--he could automate them, and they could be open 27/7?

http://www.amazon.com/gp/help/customer/display.html?nodeId=2...

There is a saying "ask 10 doctors or lawyers get 10 opinions".

Well this is my opinion based on 35 years of business experience and having graduated from an Ivy business school as well. And reading, operating and observing business from before most HN readers were born. In other words not just reading blogs or online comments or whatever. It's a pattern that I've seen. Having seen bullshit of different types previously.

Sure I could be wrong "ask 10 doctors" but I do have a basis for my thoughts.

Edit: Because of course being in business and making a profit for 35 years means nothing to the younger generation on HN.

Diminishing returns will be Amazon's downfall

> but the bottom line is they aren't making money and haven't pinned to a date they plan to do so

They have a healthy EBITDA, they're just choosing to reinvest their earnings, as they deem it's more efficient use of their capital than declaring a profit, paying a corporate profit tax off it, and then keeping the rest of the cash.

There has been a distortion in the markets lately with the value of cash. Over the long term, buying a share of any company (Amazon, Intel, Walmart) has to give a return to the holder of that share. Otherwise, you are trading cash to hold onto a piece of paper and get it returned back as cash when you sell it.

This invalidates the time value of money. In other words, if I am not getting a quarterly/annual dividend (ie a profit payout) on a stock, over the long term there is no incentive to hold onto that stock, because I could get a dividend from a different stock or some other investment in general.

If the company can increase the value of your share by spending the money rather than giving it back as a dividend, why would they not? Buffet's Berkshire Hathaway is famous for never having given a dividend. Amazon is still seeing good revenue growth year after year, I see no reason not to continue down that path as long as they can afford the growth.

By this argument, a bar of gold invalidates the time value of money. So does the existence of artwork.

Artwork pays a convenience yield. You can look at it.

But I definitely agree with the gold example.

well, you are betting that you will get a dividend at a much later point in the future because of the growth you think you will realize. if Amazon makes $100 it can either give it to you now, or reinvest it and give you the reinvested result much later. It makes sense to give you the $100 now, if they don't see any good investment opportunities. But they think they do, and market agrees with them, hence massive growth in stock price over the last 3-5 years.

It's also a unit of control, which has increasing value as the value of the company increases.