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  • skiidady skiidady Oct 13, 2012 2:47 PM Flag

    Amazon Buys $1 Billion Of Real Estate

    And plans to build 3.3 million sq.ft. in downtown Seattle. Doesn't sound like they are struggling too much financially. Still $4 billion in the bank...........

    Sentiment: Strong Buy

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    • "Still $4 billion in the bank..........."

      A $115 billion company with $4 billion in the bank and an upcoming quarter with losses, now that is what I call a very profitable company and very cheap stock.

      • 1 Reply to kenji100
      • Kenji:

        Look at current assets and current liabilities. That cash is required to pay vendors. If Apple (who Amazon is targeting) and a few others every refused to extend extended payment terms and the working capital went from negative to positive, Amazon would implode quickly. Not quite sure why Apple, Samsung and the other companies that make up much of Amazon's sales want to help it. Consumers can always buy their products elsewhere... It is a retailer without power over the consumer... It just happened to have an artificial competitive advantage via the online tax subsidy before that enabled it to undercut on price and maintain margins... The uncollected tax exceeds Amazon's net margins...

    • I hope they do not stumble with their razor thin margins. It might only take one thing like the workers forming a union.

      Sentiment: Sell

    • The real question to ask is:
      Why did Amazon pay $644/sft when the going rate for office space in South Lake Union district of Seattle is $300?
      Perhaps hoping Paul Allen would return the favor and help Bezos unload the 1 million shares which have been registered for sale for over a month through Morgan Stanley?
      Connect the dots.
      Quid pro quo.

      • 1 Reply to krk_krk
      • Because when your market cap is 300*TTM, almost 60X EBITDA and over 30X operating cash flow, acquiring any physical asset makes sense because most of the market cap of this company is a hydrogen balloon waiting for a spark. As I said with GMCR, it was shoring up the lower bound of its future valuation when it was paying a premium for licensees. In time, people will realize amazon was doing the same.

        The huge mistake in this case is that taxes, particularly real estate taxes because buildings are not mobile like most other assets, will be going up big time. Amazon's real estate tax burden will skyrocket going forward as other commercial real estate drops in value while amazon just established the "market value" for its space. Anyone who understands state and local real estate taxes knows that the taxing district just establishes a budget and allocates the tax according the the total assessed valuation. Amazon has just graciously agreed to shoulder a far higher portion of those entities budgetary needs...

    • A desperate move to capitalize what would be a rent expense over 39 years of depreciation.

      Sentiment: Strong Sell

    • This is eliminating $1.5 billion in lease payments and signalling how bullish AMZN management is about the future. Meanwhile Techyboy fantasizes about Apple trying to choke out one of it's major retailers. Where does this clown get this stuff?????????

      Sentiment: Strong Buy

      • 2 Replies to skiidady7
      • "Meanwhile Techyboy fantasizes about Apple trying to choke out one of it's major retailers. Where does this clown get this stuff?????????"

        Techstrategy failed as an entrepreneur running a small R&D company, so he just can't stand anybody successful at anything. He cannot stand Jeff Bezos being so successful as a business man. He wants to see him fail. That is the ONLY reason he shorts AMZN. All reasons he cite are excuses to short AMZN.

      • And start pumping AMZN as so bullish: where were you for the run to 230? and the buildup to a multi-hundred earnings multiple which is very rare to see or hold up longterm in the stock market? just wondering and look foward to a reasonable answer from you.

    • Current assets and current liabilities are about $11B apiece. There isn't excess cash in Amazon. Better hope Apple / consumer electronics titans don't think strategically and tighten payment terms (which could push Amazon from negative working capital to neutral and weaken it materially).

      Billion dollar HQ's are always a sure sign of malinvestment.

    • Its a good thing for shorts that he's still pumping - shorts are safe.... Carry on

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