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They are profitable in many cities, they basically just reinvest 100% of profits in geographic expansion. Amazon did the same thing, and investors said the sam
by aeternus 8y ago
They are profitable in many cities, they basically just reinvest 100% of profits in geographic expansion. Amazon did the same thing, and investors said the same thing, and look how that turned out.
- Sohcahtoa82 8y agoIs there a term for costs that are purely associated with growth and not regular operations? For example, research and development on new products/features, expansion of manufacturing capabilities, building new offices, etc.? I frequently see people talk about X corporation not being profitable, but the claim is often extremely short-sighted as they ignore money being spent on growth and development. Ever dollar kept as "profit" is money not being spent on growth, which is huge when your company is still growing.
- jannyfer 8y ago“Capital costs” are probably what you are looking for.
- Dwolb 8y agoIt’s tough to tell without guidance directly from the company. For sure internally they have some sort of calculation for “If we ceased all growth activities and maximized our pricing power and minimized our costs, how much cash could we bring in over the next x years?”