AMZN will loose it's MOJO once they HAVE to start collecting
State Taxes on everything they sell.
When you can save almost 10% on most purchases due to not having to
pay these taxes, you take advantage of that,
once that is gone, watch out.
Increasing sales will slow down dramatically
As it is, they barely make a profit at all,
of course its always portrait as increasing
logistics, sales, and who knows what,
is why they can not make a profit just yet.
But oh next year will be the one
except next year will never come.
To me AMZN is 2000 all over again, it's
just a matter of time.
After having to start collecting taxes on each
purchase the next part of THIS business model
will have to be changed,
That would be shipping.
Losing a roughly 10% advantage over brick and mortar stores,
for them to make even a penny, a penny they cant even make now,
will take this stock south in my eyes.
AMZN was supposed make $.14 in the 3rd quarter
that $.14 was posted at the start of the 3rd quarter, and as
we know they came in at minus -$.60 according to Ameritrade.
Next earning 4th (holiday season) was posted at $.53 on 10/24/2012
and has been revised down to $.28, almost 50% less in one month time
2009 4th it was +$.85
2010 4th it was +$.91
20114th it was +$.38
I have bought AMZN only at earnings time, since whatever
they announce will be viewed as positive, and resold ASAP.
AMZN has a P/E of 3100 and more, yes 3100x
put that in to perspective if
AAPL had a P/E of 3100 it would trade for roughly $150,000.00 a share,
Wall Street is starting to pick on AAPL whereas AMZN can't do wrong.
Again somebody tell me why AMZN deserves such a high price and P/E
Only because those who manage our long funds are sacrificing trust in the financial system for a little higher average exit price. I remain hopeful that they will do the right thing and just continue selling through it. Better to let the air out slowly than a monstrous drop and time is running out on doing the right thing.
I'll ride this up as far as it goes. There exists no world where Amazon will capture enough value to justify anything close to the current valuation.
Sales growth has already slowed dramatically. in 2011 they grew sales by $13.9B. In 2012 they are slated to grow sales only between $12.0B and $14.5B according to their 4th Q guidance (middle of guidance is a reduction from 2011). Analysts are predicting they can grow incremental sales $120B over the next 5 years ... that is $24B per year incremental, when adding more than $14B in a year has not been possible even without sales tax impact yet , and Goog and EBay stepped up competition (not to mention IBM in web serves as well).