Amazon – Who is stupid Management or Shareholders? $AMZN

Image by Brian Sawyer via Flickr

Amazon (Nasdaq:AMZN) issued numbers and some investors claim to be disappointed. Revenues are up huge but margins are down. Spending on infrastructure was huge and guess what the Kindle Fire is being sold at near break even prices. That’s break even folks not huge losses.

Normally I criticize management. But this time I’m going for a double and will criticize management and investors. Amazon is notorious for not sharing information. They play it close to the vest and keep investors in the dark. This heightens volatility. Today the stock sold of because of bad news. management could have been more forthright and prepped market expectations.

Investors on the other hand are bailing because of a poor quarter. what went wrong. Revenues are up huge. Top line gets a big check market. Margins have squeezed. The finger points to the Kindle Fire being sold in record numbers. Each Kindle Fire represents a cash flow stream. So if you get a lot of cash flow streams started that’s not so bad. As a matter of fact that is excellent.

Amazon has been viewed as a tech stock, a growth stock and a disruptor. Somewhere along the way investors were expecting earnings growth to be uninterruptible. The assumption is nonsensical. The Amazon investor will have to decide if they are momentum oriented or if they are the classic value investor. Buy ugly and sell pretty.

In any event management needs to learn how to better communicate and reduce volatility.

Times are a changing for everyone.

George Gutowski writes from a caveat emptor perspective.

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Barnes & Noble bitch slaps Amazon. Readers and investors don’t care $BKS $AMZN

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Barnes and Noble (NYSE:BKS) bitch slapped Amazon (Nasdaq:AMZN) by declaring they will no longer sell Amazon published books. Does Amazon care that it just got bitch slapped? Did it even notice? Did a young intern go rushing into Jeff Bezos‘ office with the news?

Following a Reg FD strategy will Amazon issue a press release declaring this to be a material event? I think not. Barnes and Noble is attempting to spin-off the Nook to supposedly unlock value. This means they need to distance themselves from Amazon. This also means Barnes and Noble investors may get screwed as the value of Nook leaves the house.

It also means that if as and when Barnes and Noble goes chapter 11, Amazon will be able to say Barnes and Noble played their own games. Observers following the publishing wars may declare this to be the tipping point. Readers, authors and investors may just give up on Barnes and Noble and let them sink away.

At the same time to put perspective into perspective Amazon reports lower earnings because of huge investment in infrastructure. Something Barnes and Noble could not possibly do.

George Gutowski writes from a caveat emptor perspective.

Related articles

• Barnes & Noble: We Will Not Carry Amazon Publishing Titles In Our Stores (paidcontent.org)
• Tablet Wars: Barnes & Noble vs. Amazon (wire.kapitall.com)
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• Barnes & Noble shuns Amazon books (seattlepi.com)