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From the comments section on the article: The Emperor has no clothes The company missed earnings estimate (21 c instead of 29 c), missed on revenues, year-ove

From the comments section on the article: The Emperor has no clothes The company missed earnings estimate (21 c instead of 29 c), missed on revenues, year-over-year, in 2012 net loss was $39 million, or $0.09 per diluted share, compared with net income of $631 million, or $1.37 per diluted share, in 2011. Free cash flow decreased 81% to $395 million for the trailing twelve months, compared with $2.09 billion for the trailing twelve months ended December 31, 2011. The stock is trading at 295 times its free cash flow and free cash flow is not growing. IMO, the stock is worth at best a generous 30 times next year’s estimated EPS of $1.70, or $51 a share. Frankly, even the current consensus $1.70 for FY 2013 looks rosy, when the company makes only 21c in its best, holidays-sales quarter. E-Books or anything else that builds revenues without earnings, that is Groupon flavor “growth”. Sell-side analysts will have to come up with creative theories to justify their Buy ratings.

incision 14y ago
That kind of "should" analysis always make me laugh. AMZN should be $51, something else should be $3500. You can find this kind of number-crunching to support and refute every move of every stock with volume. I'm sure there's a great saying or time-tested analogy about concerning yourself with what a stock should be doing, as opposed what it is doing, but I'm at a loss.
- jpdoctor 14y ago
  > I'm sure there's a great saying or time-tested analogy about concerning yourself with what a stock should be doing, as opposed what it is doing, but I'm at a loss. "Markets can remain irrational longer than you can remain solvent." -- John Maynard Keynes
  - gfodor 14y ago
    This oft-quoted point is only true if you are trading on margin. A better way to phrase it to me is "Markets can remain irrational longer than you can remain alive." or, more succinctly also from Keynes, "In the long run, we are all dead."
    - jpdoctor 14y ago
      > This oft-quoted point is only true if you are trading on margin. No. Insolvency can happen with any kind of debt, not just margin.
      - gfodor 14y ago
        The point is if you go long AMZN right now you don't have to worry about becoming insolvent as much as becoming dead before the profits come rolling in.

incision 14y ago

That kind of "should" analysis always make me laugh. AMZN should be $51, something else should be $3500. You can find this kind of number-crunching to support and refute every move of every stock with volume. I'm sure there's a great saying or time-tested analogy about concerning yourself with what a stock should be doing, as opposed what it is doing, but I'm at a loss.

jpdoctor 14y ago
> I'm sure there's a great saying or time-tested analogy about concerning yourself with what a stock should be doing, as opposed what it is doing, but I'm at a loss. "Markets can remain irrational longer than you can remain solvent." -- John Maynard Keynes
- gfodor 14y ago
  This oft-quoted point is only true if you are trading on margin. A better way to phrase it to me is "Markets can remain irrational longer than you can remain alive." or, more succinctly also from Keynes, "In the long run, we are all dead."
  - jpdoctor 14y ago
    > This oft-quoted point is only true if you are trading on margin. No. Insolvency can happen with any kind of debt, not just margin.
    - gfodor 14y ago
      The point is if you go long AMZN right now you don't have to worry about becoming insolvent as much as becoming dead before the profits come rolling in.