yeah - because the Chinese will never pirate movies, right?
The Chinese will never pay for Netflix - good luck with that dream.
How do you explain the 65% move since an absolutely terrible Q on every front? It is because it is even more clear now then ever they need capital, and they need it bad very fast. I am not saying they are not a good company, not even saying they might not be a giant. But they are already trading at 7.5x sales, 27x book, and 175x 2016 PE and facing massive share dilution shortly. This thing is priced to perfection for sales 5 years now that may not materialize. Only upside is to hope the over exuberance continues. And that is why I don't short it - because that over exuberance could continue.
You cannot short growth stocks with negative cash flow and a horrible balance sheet. These are the stocks that are controlled by the banks because they need debt and add-on offerings - the most lucrative business for banks. The stocks are propped up by sell-side analysts and trading desk support such that they look healthy at debt time. This is exacerbated by shorts, as they are easy prey to sell low and force to buy back high.
Behind only Apple, Microsoft and Exon Mobile. Less than 3% away from XOM.
Never thought that was possible - AAPL has faster growth, and operating margin of 30.5% vs. 1.7% for AMZN
massively overbought, and this upgrade is not driving volume - while there are no sellers yet (waiting for a top), there are no new buyers available .. only 1.5M shares in the first hour on a huge upgrade to $800. This type of exhaustion will results in a sell off back to Fibonacci levels .. I see 630 over next 4 weeks.
3 things on this upgrade this morning:
(1) this is a rotation upgrade - meant to allow holders that want out some high-priced liquidity today, those who buy today will be bagholders (and short-coverers)
(2) Morgan Stanley is a key underwriter in Amazon debt - this is payback, and payforward for the soon new debt issuance
(3) Morgan has been wrong over and over on Amazon's numbers .. back Jan 2013 they predicted $133B in revenue for 2015 (and they placed a $325 target on that number). Based on current consensus of $107B, they are only off by ~ 25%, and yet the target is raised to $800. No shame.
Remember - it can only go down if institutionals or insiders sell as they own 86% of AMZN - and they never sell. Its been the same holders for more this entire run from 180 4 years ago. The little bit of retail buying each day is what pushes this up against very little sell demand. This stock trades 3M shares a day, or only 0.6% of float. Not exactly liquid, and why the price moves up and up and up with no break. The inside game is to hold it and sell puts as a dividend, and then when AMZN needs capital, upgrade them, and make the commission. Very easy money and controlled by a few led by Jeff and Cap World.
That is a $36B increase in market cap over the past 2.5 weeks. Keep in mind that Amazon over its entire lifetime ( 20 yrs) has generated a grand total of $1.9B in retained earnings! Cash flow over its lifetime is negative.
AMZN has had more than $21B invested in capital and debt over its lifetime and has book value of only $11B presently ... $10B has been destroyed.
Don't be a bagholder .. 10% drop = #$%$ ... AMZN is floating on nothing but a wing and a prayer ...no fundamentals to support the price means huge drop when they show poor growth - Comscore already showed Q3 will be weak for sales at AMZN. Do you want to take that risk with such large gains already for the year?
Of course your right, but the problem is that it could take years (or just days) to play out in this environment of easy money to support these Ponzi schemes. We just don't know. There is usually no prior indicator of when it happens, because one morning you wake up and a large shareholder decides to take its profit and then it collapses by 90% over just a couple of months as everyone runs for the exit, with no bottom support of profits or cash flow..
Wow - I have heard every reason in the book to upgrade AMZN .. but valuation??? that is a first ... stock is up 65% this year, and now Evercore feels it is undervalued .. good timing on the advice idiot.
Unlike other high fliers, they are in great financial shape and growing fast with awesome cash flow ... this is the type of company you want to hold when the dust settles. It will bounce back, as fundamentals are on its side for the long haul.
NO interest in the 9th largest company in the S&P500? One fund gets out, and look out below - zero liquidity.