Amazon Drones May Crash and Burn while Google Robot Trucks Deliver $AMZN, $GOOG, $TSLA, $FDX, $UPS, $DPSGY, $SAMS

Amazon.com Inc as we all know pulled a great publicity stunt and announced delivery by drone coming soon just a soon as technology and regulators allow it. A little bit too Star Trekkie for me. Consider this:

A customer lives in a high-rise condo. How do you deliver to a specific condo?

A customer has been receiving products at work because someone is always in the accept. how do you deliver to a high-rise office.

Just how many of these things will we need. Right now a delivery truck can easily take care of 200 customers during a day. Trucks are loaded at night and drivers roll in the early morning deploying as the urban traffic patterns allow. Consumer deliveries at night are not feasible.

Half hour delivery or its free is tough. Just ask any pizza operator. Or watch a pizza delivery guy in traffic ahead of you. It’s dangerous.

What about urban guerilla warfare. How many geeks and techs will hack the airwaves and pirate the shipments. If the mob can high-jack a tractor-trailer of goods the mob will learn how to high jack drones. Not to mention bored but brilliant teenagers who will just try to shoot them down.

I’m putting my money on Google with its driver-less cars. Add in some Tesla green tech and you have trucks that can deliver. The drones will be robots that can bring from truck to doorway.

Oh and there’s always the terrorists who will deliver a small but lethal package right to the Whitehouse and god only knows where else. Free shipping it beats high jacking jumbo jets and all that airport security stuff.

If you thought Apple Inc, Samsung and Google had global patent lawsuits going FedEx, UPS and DHL will not sit back and let Amazon take this one over.

Goodreads surges to 20 million readers $AMZN

goodreads recently acquired by Amazon (Nasdaq:AMZN) has surged to 20 million readers. Amazon says they will not try to change anything which sounds like a good idea. Amazon just needs the community to be engaged and they have a powerful in-house marketing tool which engages readers endlessly.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter @financialskepti. Follow his evil twin who writes Wall Street Murder Thrillers on twitter @georgegutowski

Amazon Artistic Noise as it Reaches Higher Highes. Beware the Hype $AMZN $BID

Amazon (Nasdaq:AMZN) punches its way into new territory. Technical traders are all chanting go-go-go. But when a stock is charting new territory it sure helps to put out some fundamental news bit that makes it look like amazon will continue to take over the world.

So today the story circulates about Amazon taking over the staid art world and becoming an on-line auction house supposedly competing with Christie’s (LON:CTG) and Sotheby’s (NYSE:BID)  and such. Through some uber big numbers out there and investors will take the stroke and bid up the shares.

But really lets take a look at Amazons disruptive powers. Amazon can sell a $40 hard bound book more effectively than traditional bookstores. Readers get same product at cheaper price and better convenience. OK Got that.

Traditional auction houses have networks of specialist well versed in art. Trained and experienced. They know where the buyers are. It’s the ultimate data base fueled by old school shoulder rubbing networking. Same cocktail parties see and be seen. Make a splash. Galleries will nurture new talent. Can you imagine Amazon having an opinion on a piece of art. Art is like venture capital. Back the right artist and make lots of money.

So far Amazon has no game. When you buy and sell art in the seven figures no one cares if your platform is cloud based. It’s about the art. So Amazon may have some back room technologies which they can license  to galleries but that’s about it. Oh by the way. Amazon collects data; a lot of data. Some art collectors do not want data collected on them. Know what I mean. Amazon may just be the kiss of death that keeps away cheque books.

So boys and girls its hype today. This is not a fundamental change for Amazon. but it just might get you to buy a little bit more for what you think is a good new reason.

George Gutowski writes from a caveat emptor perspective.

Wal-Mart wants to Butt Heads with Amazon over #ecommerce $WMT $AMZN Stubborn like an Arkansas Mule

Wal-Mart (NYSE) looking to keep growth alive is looking at building huge warehouses and competing against Amazon in the E-Commerce space. A couple of Black Swan events to think about. Wal-Mart given its rise, does have a master of the universe mentality. Wal-Mart destroyed small downtown neighbourhoods and sanctified big box retail in suburban locations. They offered the cheapest price and turned everything into a commodity. The product line is the me too stuff or block buster products guaranteed to be hot. No real merchandising designed to offer and entice.

Yes Wal-Mart is building large warehouses. But a warehouse is a cement floor, cheap aluminum walls and a roof that hopefully holds up. 66% of the US population lives 5 miles away from a Wal-Mart store. So a fleet of trucks should be able to deliver very easily. Building warehouses and buying trucks is not difficult. Running a mean and lean logistical infrastructure will be difficult. Wal-Mart outsources major components and relies on intimidation to manage vendors. They do not have a holistic self managed culture.

Wal-Mart depends on consumers coming into the store and not remembering the cost of commuting. Cloud e-commerce will need to absorb the cost of delivery. With the lowest price in the land the margin does not have room for further discounting. You will not be able to make much money on cheap toilet paper or cases of heavy soft drinks with razor-thin margins. When you pick up some cheap sweat pants and a few T-shirts you are not interested in a delivery charge. When you buy something fashionable from Amazon the delivery charge is negligible after all the value added.

Amazon meanwhile is leading in e-commerce by offering value added products not the cheapest. The e-commerce business will be driven by software in the cloud. Wal-Mart buys its software and relies on third part developers to keep it fresh and competitive. Wal-Mart has not varied its model from day one.

So if someone is expecting battle between an Arkansas Mule and West Coast Cool my money is on cool. Wal-Mart is not a true innovator.

George Gutowski writes from a caveat emptor perspective. Personal preferences tend to West Coast Cool. I rarely need an Arkansas Mule.

Jim Rogers did what with smallcap Fab Universal. Watch Black Swan. $FU $GOOG $YHOO $FB $AMZN $NFLX

Fab Universal (NYSE:FAB) announced that the very famous investor Jim Rogers long beloved by Financial TV has joined the Board of Directors. Fab is a small cap trading under $5. They are in the digital media space in China and creating lots of cash flow. So why would Jim Rogers accept a seat on the Board. He is rich and another buck may not be as exciting as it used to be. If he truly believes in the potential and no one doubts his integrity why not just buy a lot of shares, let the market know you are long and wait to cash in.

The Chinese market is seductive and enigmatic. Digital is a real play for the future. Jim Rogers is long recognized as an astute commodities investor and China is a huge commodities buyer. So he gets into China with a digital play. Google (Nasdaq:GOOG) has difficulties in China. Yahoo (Nasdaq:YHOO) has stubbed its toe in China and is still not sure if it was cheated outright or just diddled a little in the back seat of puppy love. But someone with deep pocketed books will most likely appreciate all the heavy lifting that`s been done and open up the cheque book. Amazon (Nasdaq:AMZN) Netflix (Nasdaq:NFLX) Facebook (Nasdaq:FB) are all looking for big bold plays and think nothing of billion dollar acquisitions. So on a current market cap of $72 million the numbers will work out rather well.

The communist party is still totalitarian if it got pushed strongly enough. But the China market is huge and enticing.

Fab Universal is still readily unknown. The Wall Street Journal at time of writing still says no news on Fab for the past two years. So this is what I think Jim Rogers is up to as he swings for the fences.

Buy in and arrange some preferably financing.

Expand services and get yourself on the map. Annual revenues are just in the tens of millions. With a compelling product and enough working capital the China market can be very kind to shareholders.

So as you are expanding and growing and creating cash flow and profits you will attract the attention of the big dogs who will want to buy a growing concern in the China Market. That’s when the take-over offer is made at huge multiples and Jim Rogers cashes in yet again. So far so good. I can just see investors hit the buy button very hard.

Oh look here comes the Black Swan. We may have to wring its neck. The China market is not a private property driven liberal democracy with enshrined rights of ownership. They play by their rules which they make up as time goes on. Fab Universal will need to keep the Chinese political and economic power élite engaged, warm and fuzzy. If Beijing decides it wants to crown another king it will do so. The Chinese consumer will be switched over to other choices and forget about Fab.

The risk is political. We are speaking about media which politicians will watch over carefully. If Jim Rogers understands the China Market he needs to ensure the political factors are well ties down and stay in favourable trends as time goes on.

George Gutowski writes from a caveat emptor perspective.

Amazon Discounts Kindle Fire Evil Genius or Desperate Stupidity $AMZN #kindle $AAPL

Image representing Amazon as depicted in Crunc...

Image via CrunchBase

Amazon (Nasdaq:AMZN) has dropped its Kindle Fire retail price by $50; dropping to some $249. Some view they may be under guidance as they are leaving $50 on the table. But as you head into the short frenetic end of the Christmas season a price drop will improve sales and long-term customer loyalty. The main goal of a tablet is to suck money out of your bank account into theirs. So the supposed $50 price drop will be more than compensated by increased sustainable revenues.

The money flow action is 0.96. Marginally negative but nothing to worry about. Investors are starting to over focus on the short-term issues. Yes Amazon is in a strategic fight for on-line retail dominance.

But watch for the following possible moves which can change perceptions to the better.

  1. Amazon can start paying a dividend and signal they believe their cash flow is stable and sustainable.
  2. Amazon can borrow a billion dollars long-term at low-interest rates and lock in positive spreads as rates start to climb.

The big moves will be with capital structure not tactical pricing issues for key products.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti

Netflix gets a fuzzy picture $NFLX Big Dogs have no skin in the game.

Image representing Netflix as depicted in Crun...

Image via CrunchBase

Netflix (Nasdaq:NFLX) has a leadership team with very little skin in the game. CEO Reed Hastings salary doesn’t depend on Netflix’s business performance.  Netflix has taken the unusual move of granting its named executive officers only fully vested stock options. Who runs the compensation committee?

Reed Hastings makes $500K per annum. His stock options were cut back in 2011 but he made $43 million that year by exercising 190,500 of stock options earned in times past. He and his henchmen probably do not have fire in the belly.

The stock is around a 34 trailing PE and has a short interest of 28.87% of the public float. Money flow is an anemic 1.04.

It looks like the boys do not have their eye on the ball.

George Gutowski writes from a caveat emptor perspective. Follow him on twitter@financialskepti