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Interesting piece from the article: "Sussman points to evidence that Amazon has already flipped the switch, moving from dominating the market by undercutting ri

Interesting piece from the article: "Sussman points to evidence that Amazon has already flipped the switch, moving from dominating the market by undercutting rivals to reaping the profits from that dominance." So according to Sussman, Amazon is already making money. I wonder what point in time the author thinks Amazon started making money. If the author claims that happened e.g. in 2016, them Amazon was actually losing money for the first 20 years of its operation. That would require Amazon to have been raising capital for a long, long time. Can that be verified? Are there stock market metrics on total amount of capital raised/net borrowed in a given year? Has anyone been able to access the actual article to check the details of authors claims?

Despegar 7y ago
They haven't needed outside capital because Amazon has been generating free cash flow since 2002 or 2003. They were losing money on a GAAP basis because they were investing in capex heavy things like warehouses and data centers. Looking at Amazon's aggregate financials doesn't tell us anything about whether they're doing something anticompetitive.
- markwkw 7y ago
  The root of Sussman's claim is that Amazon was hiding some expenses to _pretend_ that they were cash flow positive. (since being cash flow positive strongly suggests that there is no predatory pricing) <quote>However, Sussman asserts in his paper, “Amazon utilizes existing loopholes in Generally Accepted Accounting Principles (GAAP) disclosure regulations to exclude a significant portion of its expenses.”</quote> So the author is claiming amazon's _not_ been cash flow positive. If that is the case, then where was the money coming from?
  - TulliusCicero 7y ago
    Yeah, this is what I don't get. Amazon has been steadily growing without injections of investor cash for a long time now. If they were constantly selling stuff at a loss, that would be impossible.

Despegar 7y ago

They haven't needed outside capital because Amazon has been generating free cash flow since 2002 or 2003. They were losing money on a GAAP basis because they were investing in capex heavy things like warehouses and data centers. Looking at Amazon's aggregate financials doesn't tell us anything about whether they're doing something anticompetitive.

markwkw 7y ago
The root of Sussman's claim is that Amazon was hiding some expenses to _pretend_ that they were cash flow positive. (since being cash flow positive strongly suggests that there is no predatory pricing) <quote>However, Sussman asserts in his paper, “Amazon utilizes existing loopholes in Generally Accepted Accounting Principles (GAAP) disclosure regulations to exclude a significant portion of its expenses.”</quote> So the author is claiming amazon's _not_ been cash flow positive. If that is the case, then where was the money coming from?
- TulliusCicero 7y ago
  Yeah, this is what I don't get. Amazon has been steadily growing without injections of investor cash for a long time now. If they were constantly selling stuff at a loss, that would be impossible.