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What you are missing is that the reason why Amazon aren't "making a profit" is because they are spending all their revenues on infrastructure. While they are s
by rednukleus 14y ago
What you are missing is that the reason why Amazon aren't "making a profit" is because they are spending all their revenues on infrastructure.
While they are still rapidly growing on an international scale, with very low margins they can hide all their profits in expenses.
The long game is not to jack up prices, profits will come as soon as they slow down growth. Which will not be for a while.
- YZF 14y agoI'm not an investor in Amazon and I don't follow the company but as a general rule what those companies will disclose is a bit of BS mixed with PR in the right amount so they're not obviously breaking any laws. At the end of the day what you can trust is the numbers and the rest you need to guess. This "spending on infrastrcuture", "one time costs", is the standard excuse (e.g. see Intel). As Amazon grows they will need more infrastructure and they will need to start replacing some of their existing infrastructure. I agree that during accelerated growth the profit will lag these expenses but exactly by how much remains to be seen once their growth stabilizes.