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They’re reaching a market cap where it would make sense to fire everyone but AWS.
by faangiq 4y ago
They’re reaching a market cap where it would make sense to fire everyone but AWS.
- Mountain_Skies 4y agoIt's confusing why investors haven't pushed harder for AWS to be spun-off into its own entity.
- hiddencost 4y agoThe largest customer of AWS is Amazon. AWS would not be profitable without Amazon.
- franczesko 4y agoI don't see any benefits for Amazon as a whole of doing so.
- Bilal_io 4y agoWhy would they do that when one entity's losses can be used as a tax write-off for the other entity's profits.
- di4na 4y agobecause an option on a basket is worth less that a basket of options
- devoutsalsa 4y agoInvestors like profit and they like growth. The moment a business unit isn’t growing or profitable, you need to start justifying why you’re keeping it around. On the topic of write offs, losing money isn’t great unless it’s used to fuel obscene growth. You don’t spend $2 to save $1. The “we lose money on every sale, but make up for it on volume” model doesn’t work in the long run. More simply, a business is worth the value of all future cash flow, and it’s that simple.
- dragonwriter 4y ago> Why would they do that when one entity's losses can be used as a tax write-off for the other entity's profits. Because it's better to not have losses than to use them as tax write-offs (also, because basically every use of funds other than retaining profits is already a tax write-off for business, and the ones that aren't losses contribute to future profits.)
- Ekaros 4y agoLosing and investing money are different things. It's all fine for future to spend money on new warehouses, distribution hubs and better software. But there is expectation that this will at least increase revenue if not the profits. If it does not it is just waste that any company is better off with.
- tyrfing 4y agoMassive company, so an activist would need a lot of capital for any noticeable stake. Overall reasonable and relatively consistently increasing valuation, so there is little incentive. If the stock does very poorly while AWS keeps growing, so the company value diverges further from the value of individual divisions added together (sum of the parts value), you could expect pressure on this.
- syshum 4y agoElon should buy it and take it Private ;)
- idiotsecant 4y agoFor real. Amazon's retail side is nothing but bad pr and other messy human entanglements. AWS is clean, profitable, and nearly ubiquitous. I definitely know which business I would rather be in
- thinkling 4y agoThe guy who used to run AWS now runs the whole show, so maybe it'll get better on the retail side over time?
- robertlagrant 4y agoIt's not about management. One business has many low paid workers as part of how things have to work; the other has fewer, high skilled workers.