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Amazon.com, Inc. Message Board

  • ace_bigaloww ace_bigaloww Apr 23, 2010 7:29 AM Flag

    I also have questions about AMZN accounting

    and balance sheet and I am very serious. How does this company have $14 billion in cash? They lost tons and of money every year for many years after their IPO. They did not become profitable until just a few years ago.
    Now they have $14 billion in cash? I have followed their earnings every quarter. Do their employees work for free? And what about all of the free shipping? They don't have to pay for that? Where did the $14 billion come from?
    Somebody please tell me, because the numbers DO NOT ADD UP. If they have this cash, why don't they pay a dividend? If you owned a piece of a restaurant, you would want a piece of the profits, wouldn't you?

    SortNewest  |  Oldest  |  Most Replied Expand all replies
    • "Do their employees work for free?"

      ...stock options granted....company stock buyback program run = a misleading picture of their true net profit.

    • >No idea.

      Then how do you know that the fee can cover "much" of the cost?

    • "So what would it cost you as a % of membership fees if you had to pay for all that shipping yourself, roughly, do you think? "

      No idea. I don't know what AMZN's shipping rates are. I know they are much lower than mine.

    • >Yes much. And yes I am a member.

      So what would it cost you as a % of membership fees if you had to pay for all that shipping yourself, roughly, do you think?

    • "Much? Are you a member? "

      Yes much. And yes I am a member.

    • >much of AMZN's free shipping is funded by their Prime program.

      Much? Are you a member?

    • "But idiot shorts claim Amazon doesn't make any money on those items and especially not enough to cover free shipping. "

      They do? I think you are confusing "none" with "3-4%". And besides, much of AMZN's free shipping is funded by their Prime program.

    • >AMZN funds the free shipping out of their profit on the goods they sell themselves.

      But idiot shorts claim Amazon doesn't make any money on those items and especially not enough to cover free shipping.

    • 5,887 million of the cash is from the "Additional Paid-in Capital" which is the amount raised at their IPO plus from what was paid over the years to the company as those given options excercised it (and then turned around and flipped it to the gullible investors). Another 3,619 million is from vendor financing aka Accounts Payable.

      • 2 Replies to kozakkk667
      • Appreciate if someone knowledgeable (Timber/Nemesis?) can comment/rebut my earlier post.
        5,887 million of the cash is from the "Additional Paid-in Capital" which is the amount raised at their IPO plus from what was paid over the years to the company as those given options excercised it (and then turned around and flipped it to the gullible investors). Another 3,619 million is from vendor financing aka Accounts Payable.
        And purel's comment: 6 Billion (nemesis' figures) minus 5.89 billion from capital paid-in by investors means they accumulated just 110 million cash from biz activities over all these years? Or does it means their real biz is selling their stock?

      • 6 Billion (nemesis' figures) minus 5.89 billion from capital paid-in by investors means they accumulated just 110 million cash from biz activities over all these years? Or does it means their real biz is selling their stock?

    • >So what assets a company owns is meaningless in their valuation?

      Look at it this way. I hire a guy or two to predict stock prices for me. Guy A does his calculations on a cheap computer. Guy B says dumb things like never 90 or drift to teens or losing 1/2 million is good news for his investing but he uses an expensive computer and wears more expensive suits. Guess what? When I go to fire one of the guys the cost of the computers or suits never, ever enters my mind. I wonder why. Oh, by the way, the guy who got fired, was the one who said never 90.

      >So if WMT reported a loss this year, does that mean their stock should be worth $0?

      Only to an idiot who thinks short-term results are all that go into valuing a stock. You value the company on what you think their life-time cash is going to be, not on what they invested into the company that may have generated lower results than usual. That's why you thought the report was "bad", because you think a short-term loss is somehow useful or meaningful information.

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