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At Amazon's scale you cannot simply turn tens of billions of dollars into economically meaningful growth. If you could, and expect proportional increase in valu

At Amazon's scale you cannot simply turn tens of billions of dollars into economically meaningful growth. If you could, and expect proportional increase in valuation, then nearly every company would be doing the exact same thing. Take for instance Apple. They are netting some $48 billion a year with much more than that on hand. They clearly desperately want to move beyond just the iPhone and have been trying all sorts of ideas, but nothing is really sticking. And so they've been left to resort to spending literally hundreds of billions of dollars on share buybacks to try to increase the stock price that way. If they could just invest their profits into growth and expect proportional benefit, that's precisely what they would be doing!

imtringued 8y ago
If they have no use for their money they should give it back to the shareholders who then invest it into companies that actually need it.
- Denzel 8y ago
  That's sort of what a stock buyback is. Think about it.
ajmurmann 8y ago
The bulk of Amazon's "investments" are leaving profits on the table and thus undercutting competitors and in essence buying market share.
- TangoTrotFox 8y ago
  "Undercutting competitors" and "buying market share" is literally what defines competition. And this is phenomenally good both for the consumer and for the companies that are able to slim themselves down enough to succeed. Comcast, for instance, isn't really a monopoly. There are numerous other big players in that industry. But the thing is that instead of "undercutting competitors" and "buying market share" the competitors all agree to cooperate and split up the market. The result is when you buy something from Amazon, you're hitting quite close to the wholesale cost of that item. And when you pay your high speed internet bill to Comcast, what you're paying is some large multiple of the real cost of service.

imtringued 8y ago

If they have no use for their money they should give it back to the shareholders who then invest it into companies that actually need it.

Denzel 8y ago
That's sort of what a stock buyback is. Think about it.

ajmurmann 8y ago

The bulk of Amazon's "investments" are leaving profits on the table and thus undercutting competitors and in essence buying market share.

TangoTrotFox 8y ago
"Undercutting competitors" and "buying market share" is literally what defines competition. And this is phenomenally good both for the consumer and for the companies that are able to slim themselves down enough to succeed. Comcast, for instance, isn't really a monopoly. There are numerous other big players in that industry. But the thing is that instead of "undercutting competitors" and "buying market share" the competitors all agree to cooperate and split up the market. The result is when you buy something from Amazon, you're hitting quite close to the wholesale cost of that item. And when you pay your high speed internet bill to Comcast, what you're paying is some large multiple of the real cost of service.