.........just a matter of time....especially if AMZN attempts to go toe to toe with the 800 lb gorilla.
Actually, Wal-mart is fighting a losing battle. They've never gone up against someone who had a significantly lower cost structure than them before like Amazon. In fact, Amazon already drove Wal-mart's first iteration online into bankruptcy as it was forced to be folded back into the company after the dot.com bubble.
This trend does not bode well for shorts who are banking on Wal-mart but failed to do their homework before placing their bets:
3Q09 vs. 3Q06-, 12-Month Trailing Net Margin Comparisons
(in $ millions)
________ 3Q09 _ 3Q06
Amazon: _3.66% _ 3.16%
Wal-mart: 3.34 __ 3.64
(Amazon margins above exclude $90 million tax benefit in 2005 and ToysRUs settlements of $51 million in 2009)
Wal-mart revenues may be 20 times Amazon but their cash is only twice that of Amazon which is rapidly closing that gap--plus Wal-mart is saddled with huge debt while Amazon has used its cash to pay down debt and carries comparatively little debt.
Seriously, if you were long from under $100 or even from $110....take profit tomorrow and let this over inflated balloon pop when high expectations for either big revenue gains or earnings growth (or both) fail to materialize on the backs of another piss poor xmas retail season.
You will be able to buy back in much cheaper sooner rather than later.
How do you know wmt is losing money. They purchase 20 times the goods of say AMZN. I would think someone with $400 billion in sales versus $20 billion would get some type of better pricing on supplies. Ask a supplier of wmt if they beat you up over pricing. They are brutal and only getting more aggressive in beating up suppliers.
Who do you think gets a better discount. Ask yourself what happens when broke states look for sales tax $$$. So amzn starts payings sales tax and pays higher for the product.
do you realize amzn and wmt net about the same 3.7%. based on that amzn will need 1.4trillion or 1,400,000,000,000.00 in sales for their book value and market cap to equal. wow 18% of the national debt wow.
major progress here - even nyt is referring to amzn as a retailer! I'm a little tired of the comarisons to aapl and goog and hearing about the "halo" effect of the kindle. what a joke. kindle has as a tiny bit more technology than the hand held calculator.
mrkt cap of wmt 210B on 420B in sales
mrkt cap of amzn 58B on 23B in sales
just a little disconnect here