The Best Time to Short AMZN is NOW –4/8
The Best Time to Short AMZN is NOW –4/8
It is very difficult to do this with amazon’s solution, and this will never be something they are good at, given that they do not have a retail presence themselves. If you cut offline retailers out of the market, who are you left with, other than a few small niche online retailers who have themselves spent millions developing their own systems?
4) AMZN’s other services (search, storage, cloud computing, etc.) are of questionable value, and are not related to their core competency (ecommerce). They might be able to make a few million from selling some extra memory and bandwith to startups (as they do now), but in my mind these don’t representative particularly valuable near term or long-term business models.
For many of these reasons, Amazon has been eaten alive by GSIC in the e-commerce services space, which is the only area where I believe AMZN has a potentially valuable product. GSI, originally operator of small website Fogdog.com, has taken many of amazon’s customers and won many contracts in head to head battles with e-commerce behemoth. GSIC reported $600M of revenue in the last fiscal year with its business here. Though AMZN does not break out this revenue, its other bucket for $263M for FY2006, so at the very least this business is half that of GSIC’s and most likely more like a third or a quarter. Anyhow, for arguments sake, I will assume that this division is currently worth GSIC’s EV ($1B), despite my belief that these businesses will continue to drain cash, and not be worth much of anything at all.
To be Continued….
(Meanwhile, here is a link to see my past articles of some good picks:)
http://www.mystockwinners.com/signs-of-going-down-for-amzn/
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