"as long as the stock can make thirty point either way in a couple of weeks"
If it comes from the company producing for example a surprise in earnings that altered the PE greatly then the PE had everything to do with the thirty point move.
Amazon is a great company to buy cheap things from, and it's stock is a great momentum play stock anything in between is irrelevant and speculative.we only examine the financials of a company if we want to invest for dividends , other than that we just play the trades of momentum stocks.
"It's now more of an electronics retailer ... "
Kindles are electronics and as with early stage physical books and other merchandise they focused on rapid marketshare growth in the beginning. So this has more to do with Kindle being an early stage business (negative to flat margins) than whether or not it is electronics.
And it is part of the expansion which you don't seem to recognize. Expansion into other product categories which usually begin with negative margins and become profitable as the years go on. You may think that all these factors are going to remain static but the estimates are probably a better reflection of what that market thinks and how it is valuing the stock and that includes 28% earnings growth per year and margins higher than what you are hoping for.
"new ways of selling digital content in which AMZN can't easily participate have cropped up an gained share, like the iOS connection to iTunes."
Maybe you were unaware but iTunes has been around for a longer than two years and there are twice as many dedicated e-readers out there compared with iPads.
Thanks! Regardless or what the stock does, I hope you have a happy birthday.
As I said, I'm trying to learn about options. I take it you bought $205 puts and $215 puts. I thought you had about $1,000 in your puts, but to buy those puts on 13,000 shares, wouldn't that cost abotu $100,000?
That is not a given. AMZN has changed a lot in the last 2 years. It's now more of an electronics retailer ... also, new ways of selling digital content in which AMZN can't easily participate have cropped up an gained share, like the iOS connection to iTunes.
The one thing going FOR AMZN margins in the short term, might be the lower crude price because of the strategic reserve dump.
Spy is symbol for S&P 500 ETF. It is by far the largest ETF (around market cap of amazon). It has the most liquid volume and spread.
I could be very wrong on this highly leveraged bet. My birthday is around options expiration. If directional bet pays off, I'll be a very happy person. In essence I shorted an equivalent of $2.8 million AMZN worth on 13,000 shares. Target $200-$205 within a week.
this is the highest PE amzn has had in years! Maybe it is time to think the stock is overvalued!!! I am betting amzn will be $120 stock at best after taxes kick in. the kindle is a stupid machine and will be obsolete amzn is not in the business of technology creation it sells online and is a retail stock !@!!