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  • ayahtolla2003 ayahtolla2003 Feb 2, 2013 7:18 AM Flag

    Barron's is out with support for AMZN this weeked: says 3rd Party sales is the key driver in the future

    And AMZN will move toward being the infrastructure platform of these sales, and slowly diminish ther own % of the sales, thereby continueing to increase gross margins in the future. The story is by Tieran Ray and shown on the bottom of this page. FWIW.

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    • At least to me, the improvement in gross margins this quarter was the key indicator that Bezos might pull off his master plan. That has not be ignored by the Street, this weeks price action was all about options and the put premiums were huge. This coming week should tell the real tale. With all the bearishness on this board, coupled with the fact that many higher flying momo oriented stocks were flat yesterday too, this week should see a nice bounce - if on volume it will be a move up - if for no other reason than to kill all the put premium . . .

      • 2 Replies to ajmanieri
      • This gross margin focus flies in the face of Amazon's own claim, repeated again in the latest 10K:

        "We believe that income from operations is a more meaningful measure than gross profit and gross margin due to the diversity of our product categories and services."

        Base on this it would appear improving gross margins is not part of Bezos' "master plan".

      • "At least to me, the improvemenit in gross margins this quarter was the key indicator that Bezos might pull off his master plan"

        that or WS has to move to the "gross margin" story as sale increases slow down so that story looks more flimsey. The gross margin story coveniently leaves out the more thatn offsetting fufullment expense increase: which could be a smorgasboard of stuff the might be clasified as "cost of goods sold" in their 3rd party business. More of an accounting of where expenses are placed then anyting else so far: as it allows the hype of the gross margin story. Bottom line: AMZN hasn't achieved the botttom line results that were expected off a couple years ago off the $2.52 peak base of earnings. Whether Bezos is pulling off a vision or WS is merely trying to keep the AMZN bull story intact, time will tell. Tapping the bond market shows they had troulbe funding themselves from internal operations. Option strikes, positions be damned.

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