Re:Why Amazon Has No Profits and Why It Works
by clarky07 on Saturday September 06, 2014 @02:58AM
(#8277736)
It's still worth something. All of these warehouses and data centers are assets if nothing else. You can sell buildings and land. Obviously that value alone doesn't justify the share price, but it does justify > 0 value.
The bet that investors are making is that at some point the revenues and cash flow will be so huge that Amazon won't know what to do with them and at that point they will start showing a profit and perhaps even pay a dividend. It's not entirely unreasonable. Even Apple finally started paying a dividend once they got to 100 billion or so in the bank.
Noticing that Amazon only has 1% of the retail market is pretty crazy. the potential opportunity they have is staggering. It's not unreasonable to think at some point their will be profits to be had.
Re:Why Amazon Has No Profits and Why It Works
by tim333 on Friday September 05, 2014 @05:04PM
(#8276282)
Both BRKA and AMZN have a lot of assets that could be sold for something like their market caps. Hence the value in each. Same way a gold bar is worth about as much as a gold bar even if you have no immediate plans to sell it.
Amazon is completely different from that, no? A tremendous amount of their value is in intangibles that produce revenue, rather than have intrinsic value. This is fine when you say "I want to own a piece of that revenue stream for the future profits", but if Amazon by choice will never produce net profits from that stream... do you see what I'm getting at? A goose that lays golden eggs has no value if the eggs are never sold and simply hatched.