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From: http://paulgraham.com/good.html http://paulgraham.com/good.html: In Patrick O'Brian's novels, his captains always try to get upwind of their opponents. I

by johnrob 12y ago

From: http://paulgraham.com/good.html http://paulgraham.com/good.html: In Patrick O'Brian's novels, his captains always try to get upwind of their opponents. If you're upwind, you decide when and if to engage the other ship... In this case, Amazon is upwind of becoming a giant, profitable company. They could have taken profits earlier but it would have shrunk their overall pie.

idlewords 12y ago
That would certainly explain the smell.
deleted 12y ago
[deleted]
notatoad 12y ago
Where "becoming a giant, profitable company" is another way of saying "paying their shareholders". Amazon is making money, for all intents and purposes they are profitable. They've just found something more interesting to do with that money than pay dividends. The opponent in this scenario is the shareholders, they're the ones who want to take the money away from Amazon. It's a very interesting dynamic, certainly not the way i've normally thought of a shareholder-company relationship but one that must apply to many companies.
- hnnewguy 12y ago
  >The opponent in this scenario is the shareholders, they're the ones who want to take the money away from Amazon. Take the money away from Amazon? The shareholders are Amazon. It isn't Amazon's money, it's the shareholders. If/when they want dividends instead of re-investment (which doesn't seem to be the case yet), they are entitled to it.
  - prostoalex 12y ago
    Re-investment with subsequent share growth is more efficient mechanism of value distribution than dividend payouts. First, there's no double taxation; second, the recipient can choose the timing and amount of participation as they decide on when to sell the stock.
  - eru 12y ago
    > If/when they want dividends instead of re-investment (which doesn't seem to be the case yet), they are entitled to it. In theory, yes. In practice, being an activist shareholder and going against the wishes of management is _hard_.
  - Swannie 12y ago
    Do you know how much of Amazon is publicly traded? How much of Amazon is held by the Amazon management team? You're correct in asserting that the shareholders are entitled to direct the board to do their will. However, you seem to be assuming that the publicly traded shares of Amazon a) have significant voting rights, b) are a large enough share to be significant, and c) are not held in majority by those within the company. I can't find information on either of these three... so I continue to assume it's entirely possible that Amazon's publicly traded share holders are a minority, with little voting rights.

by johnrob 12y ago

idlewords 12y ago

That would certainly explain the smell.

deleted 12y ago

[deleted]

notatoad 12y ago

Where "becoming a giant, profitable company" is another way of saying "paying their shareholders". Amazon is making money, for all intents and purposes they are profitable. They've just found something more interesting to do with that money than pay dividends. The opponent in this scenario is the shareholders, they're the ones who want to take the money away from Amazon. It's a very interesting dynamic, certainly not the way i've normally thought of a shareholder-company relationship but one that must apply to many companies.

hnnewguy 12y ago
>The opponent in this scenario is the shareholders, they're the ones who want to take the money away from Amazon. Take the money away from Amazon? The shareholders are Amazon. It isn't Amazon's money, it's the shareholders. If/when they want dividends instead of re-investment (which doesn't seem to be the case yet), they are entitled to it.
- prostoalex 12y ago
  Re-investment with subsequent share growth is more efficient mechanism of value distribution than dividend payouts. First, there's no double taxation; second, the recipient can choose the timing and amount of participation as they decide on when to sell the stock.
- eru 12y ago
  > If/when they want dividends instead of re-investment (which doesn't seem to be the case yet), they are entitled to it. In theory, yes. In practice, being an activist shareholder and going against the wishes of management is _hard_.
- Swannie 12y ago
  Do you know how much of Amazon is publicly traded? How much of Amazon is held by the Amazon management team? You're correct in asserting that the shareholders are entitled to direct the board to do their will. However, you seem to be assuming that the publicly traded shares of Amazon a) have significant voting rights, b) are a large enough share to be significant, and c) are not held in majority by those within the company. I can't find information on either of these three... so I continue to assume it's entirely possible that Amazon's publicly traded share holders are a minority, with little voting rights.