2 ms·
Man, break even means zero profit but also no losses. If EBITDA goes down or not is a different, and unrelated, question. And a different financial metric all t
by hef19898 4y ago
Man, break even means zero profit but also no losses. If EBITDA goes down or not is a different, and unrelated, question. And a different financial metric all together.
Amazon was, in its entire history as a public company, profitable in every single quarter, except 5 (!). So no, they never spend all their money on growth (they did spend a lot so but never in unsustainable ways, which is the key here). Using Amazon as an example to spend everything on growth, and profits will come, is fundamentally wrong.
- wpietri 4y agoI totally believe that a lot of startups are misusing the Amazon example. I also believe many of those startups will be royally screwed now that an era of easy money is ending. And personally, I'll be popping plenty of popcorn when they get their comeuppance. But that doesn't mean I'm going to uncritically accept your claim that "Amazon was never profitable because they prioritized growth is a meme". Because it was basically true for a very long time. It was something many Amazon investors complained about long and loud because they wanted the cash, not future growth potential that they were skeptical of.
- hef19898 4y agoCan we at least agree that any profits above zero are actually profits? And the question of just how profitable is a different financial metric?
- gizmo 4y agoNo? Because if you need tons of capital to make a minuscule profit your company is worth nothing. (A company has to outperform at least the interest people can get on bonds plus some equity premium.) Amazon could make a significant profit, if Bezos wanted. But that’s a different question.
- hef19898 4y agoThat'll be Return-on-Capital.