1. Retail sales numbers released today were dismal. Up 0.7% versus the expected figure of 2.5 to 3%. Amazon being the largest online retailer will be hit hard and their next quarter's revenue figures will probably miss. Since Amazon has little earnings to speak of, revenue is the only benchmark they can be measured against.
2. Netflix debacle. Netflix uses Amazon's AWS infrastructure to stream movies and there was an outage for the past two days that prevented Netflix customers from streaming movies during the family gatherings on Christmas. Notably, Amazon has its own video streaming service which was not affected.
3. Fiscal cliff jitters are prompting Amazon shareholders to sell after a more than 50% increase in 2012.
4. Kindle sales disappoint and Amazon is discounting its Kindle product very aggressively, possibly losing money on each sale in the hopes of selling digital content to the customers in future. If customers hold on their purse strings, this strategy may not play out as planned.
A slew of retailers were trading down the day after Christmas, as early data shows weak holiday sales, reflecting what some experts said was the slowest growth in spending since the 2008 recession. Although retailers already had cut back on inventory, many resorted to deep discounts toward the end of the season, which analysts say is likely to reduce profits.
Why measure an 18-year old company based on sales and not on PROFITS. AMZN is merely breakeven and keeps burning cash. As a result they had to borrow $3,000,000,000 a couple of weeks ago. Building more and more fulfillment areas is a lame excuse as this is required for the current growth and in order to justify the current imaginery pps AMZN has to keep building more and more and thus no profit.
Anyone wonders why Bezos sold $200,000,000 worth of shares the other week?
AMZN is a FINANCIAL SCAM and is the best short candidate in the market
it's hard to call AMZN a "financial scam" when they tell you exactly how little profit they make
the company has survived and grown with almost no debt for a long time now
the business model works, it just doesn't make much profit
AMZN is way overvalued and showing signs of correcting.
At $100, I'd be a buyer. At a 40:1 PE, I'd be a buyer.
At today's price, I'll stay very far away.