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Amazon can not afford to subsidize anything. What people don't get about amazon is that they are very poor. It's going to be interesting to see how they make
by blazespin 9y ago
Amazon can not afford to subsidize anything. What people don't get about amazon is that they are very poor. It's going to be interesting to see how they make this work. My guess is replacing instacart and keeping those profits will help balance the books. Young, Whole Foods customers like quality of WF and the time saving of home delivery.
- ceejayoz 9y agoAmazon has $21 billion cash-on-hand. Hardly poor - that's 32 times what Instacart has taken in all their funding rounds. https://ycharts.com/companies/AMZN/cash_on_hand https://ycharts.com/companies/AMZN/cash_on_hand
- blazespin 9y agoGeez, the quality of HN is really declining lately. Cash on hand is meaningless. Amazon operates at barely break even. They can't afford to subsidize anything.
- gaius 9y agoAmazon could become cashflow positive overnight if they wanted to. Operating like this is strategy for them.
- ceejayoz 9y agoFirst, cash in hand is not meaningless. If Amazon is breaking even, they're able to use that $21B to subsidize stuff. One of those $21B is probably more than Instacart has taken in as revenue total, and a couple of them would buy Instacart. Second, most of that cash on hand comes from the last 18 months or so, when Amazon started doing some profit-taking - maybe for the sorts of Whole Foods acquisitions they're doing. It's quite clear that Amazon can make profits - thus far they've just been pouring them back into growth and R&D. See the first chart in https://www.recode.net/2017/4/27/15451726/amazon-q1-2017-earnings-profits-net-income-cash-flow-chart https://www.recode.net/2017/4/27/15451726/amazon-q1-2017-ear... Third, don't be so rude.