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For much of Amazon's early history, it was something of a laughingstock, as the company had clearly stated that it didn't plan to make money in the foreseeable

by ISL 6y ago

For much of Amazon's early history, it was something of a laughingstock, as the company had clearly stated that it didn't plan to make money in the foreseeable future, if ever. At a minimum, it made the company difficult to value (and still does). One of Amazon's important achievements was to attract and retain investors willing to go along for the "their margin is our opportunity" inexorable slow-boat ride to dominance.

wnevets 6y ago
>For much of Amazon's early history, it was something of a laughingstock, as the company had clearly stated that it didn't plan to make money in the foreseeable future, if ever. I still remember John C. Dvorak saying how awful amazon is and that it will never make money just ~10 years ago.
- an_opabinia 6y ago
  Another way of looking at this is, stock value doesn't just not mean what reasonable people think it means - the meaning of prices is 200% wrong. Another way of looking at this is, no one is going to be able to redeem all the Amazon stock there is for cash at this price, that only mark-to-market is wrong. Another way of looking at this is, Jeff Bezos was happy doing what he was doing for peanuts throughout Amazon's early lifetime, so would wealth taxes or CEO compensation caps or whatever boogeyman really have dissuaded him from taking other people's money?
  - mobilefriendly 6y ago
    A wealth tax would have limited the amount of early investment available to Amazon (and the start-up ecosystem as a whole), and it very well might have forced liquidation of shares at critical points in the company's early history when Bezos was wealthy on paper as an Amazon shareholder.
  - graeme 6y ago
    > Another way of looking at this is, no one is going to be able to redeem all the Amazon stock there is for cash at this price, that only mark-to-market is wrong. Maybe, maybe not. Amazon’s daily trading volume is about 3 million shares, and there are around 500 million shares outstanding. In 150 days the entire market value of the company trades. It would be weird if the whole thing was sold at once, but there would be people interested in buying. The company has real value. https://finbox.com/NASDAQGS:AMZN/explorer/volume_avg_3m https://finbox.com/NASDAQGS:AMZN/explorer/volume_avg_3m https://ycharts.com/companies/AMZN/shares_outstanding https://ycharts.com/companies/AMZN/shares_outstanding
- scarface74 6y ago
  People could have gotten rich investing in anything that Dvorak poo poo’d https://512pixels.net/2009/01/early-macintosh-reviews-show-dvorak-clueless-even-in-1984/ https://512pixels.net/2009/01/early-macintosh-reviews-show-d... Apple makes the arrogant assumption of thinking that it knows what you want and need. It, unfortunately, leaves the “why” out of the equation — as in “why would I want this?” The Macintosh uses an experimental pointing device called a ‘mouse’. There is no evidence that people want to use these things. I dont want one of these new fangled devices.
  - sgerenser 6y ago
    I could never be sure if Dvorak was actually serious or just always writing stuff that was purposely inflammatory to get a reaction. Basically the print/magazine version of clickbait before that word was even invented.
    - wnevets 6y ago
      He would also say that stuff outside of articles as well tho
    - DerekL 6y ago
      “I was talking with Dvorak at the Vloggercon party this evening, and he started telling a story about how he deliberately pisses Mac users off to get flow for his stories…” – Dave Winer http://scripting.com/2006/06/09.html#When:10:38:44PM http://scripting.com/2006/06/09.html#When:10:38:44PM https://www.youtube.com/watch?v=NMQv0j29WHA https://www.youtube.com/watch?v=NMQv0j29WHA
redis_mlc 6y ago
Bezos, like most business people, is intensely anti-tax. So one important reason for reinvesting net income was to pay zero tax. Poor/uneducated people don't know or understand that.
whack 6y ago
> For much of Amazon's early history, it was something of a laughingstock This seems like a real stretch. Amazon IPOed in 1997 for $0.5B, and grew to $30B by 1999. It crashed to $3B in the dot com bust, but that was the case for the entire tech industry. Between 2001 and 2007, it grew 10x from $3B to $30B. Even including the dot-com crash, Amazon had grown ~60x in its first decade as a public company. I don't think anyone would be laughing at those growth rates. https://m.benzinga.com/article/15517613 https://m.benzinga.com/article/15517613

by ISL 6y ago

wnevets 6y ago

>For much of Amazon's early history, it was something of a laughingstock, as the company had clearly stated that it didn't plan to make money in the foreseeable future, if ever. I still remember John C. Dvorak saying how awful amazon is and that it will never make money just ~10 years ago.

an_opabinia 6y ago
Another way of looking at this is, stock value doesn't just not mean what reasonable people think it means - the meaning of prices is 200% wrong. Another way of looking at this is, no one is going to be able to redeem all the Amazon stock there is for cash at this price, that only mark-to-market is wrong. Another way of looking at this is, Jeff Bezos was happy doing what he was doing for peanuts throughout Amazon's early lifetime, so would wealth taxes or CEO compensation caps or whatever boogeyman really have dissuaded him from taking other people's money?
- mobilefriendly 6y ago
  A wealth tax would have limited the amount of early investment available to Amazon (and the start-up ecosystem as a whole), and it very well might have forced liquidation of shares at critical points in the company's early history when Bezos was wealthy on paper as an Amazon shareholder.
- graeme 6y ago
  > Another way of looking at this is, no one is going to be able to redeem all the Amazon stock there is for cash at this price, that only mark-to-market is wrong. Maybe, maybe not. Amazon’s daily trading volume is about 3 million shares, and there are around 500 million shares outstanding. In 150 days the entire market value of the company trades. It would be weird if the whole thing was sold at once, but there would be people interested in buying. The company has real value. https://finbox.com/NASDAQGS:AMZN/explorer/volume_avg_3m https://finbox.com/NASDAQGS:AMZN/explorer/volume_avg_3m https://ycharts.com/companies/AMZN/shares_outstanding https://ycharts.com/companies/AMZN/shares_outstanding
scarface74 6y ago
People could have gotten rich investing in anything that Dvorak poo poo’d https://512pixels.net/2009/01/early-macintosh-reviews-show-dvorak-clueless-even-in-1984/ https://512pixels.net/2009/01/early-macintosh-reviews-show-d... Apple makes the arrogant assumption of thinking that it knows what you want and need. It, unfortunately, leaves the “why” out of the equation — as in “why would I want this?” The Macintosh uses an experimental pointing device called a ‘mouse’. There is no evidence that people want to use these things. I dont want one of these new fangled devices.
- sgerenser 6y ago
  I could never be sure if Dvorak was actually serious or just always writing stuff that was purposely inflammatory to get a reaction. Basically the print/magazine version of clickbait before that word was even invented.
  - wnevets 6y ago
    He would also say that stuff outside of articles as well tho
  - DerekL 6y ago
    “I was talking with Dvorak at the Vloggercon party this evening, and he started telling a story about how he deliberately pisses Mac users off to get flow for his stories…” – Dave Winer http://scripting.com/2006/06/09.html#When:10:38:44PM http://scripting.com/2006/06/09.html#When:10:38:44PM https://www.youtube.com/watch?v=NMQv0j29WHA https://www.youtube.com/watch?v=NMQv0j29WHA

redis_mlc 6y ago

Bezos, like most business people, is intensely anti-tax. So one important reason for reinvesting net income was to pay zero tax. Poor/uneducated people don't know or understand that.

whack 6y ago

> For much of Amazon's early history, it was something of a laughingstock This seems like a real stretch. Amazon IPOed in 1997 for $0.5B, and grew to $30B by 1999. It crashed to $3B in the dot com bust, but that was the case for the entire tech industry. Between 2001 and 2007, it grew 10x from $3B to $30B. Even including the dot-com crash, Amazon had grown ~60x in its first decade as a public company. I don't think anyone would be laughing at those growth rates. https://m.benzinga.com/article/15517613 https://m.benzinga.com/article/15517613