Author Topic: AMZN - Amazon.com Inc.  (Read 651699 times)

JAllen

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Re: AMZN - Amazon.com Inc.
« Reply #630 on: August 25, 2014, 12:04:23 PM »
No, I would save it to buy back stock every few years like they've done and continue to selectively make acquisitions to build and protect the moat.


AMZN has relatively less cash than the other tech titans, so I think ~$10B is a good number for them to have.


They've been quite selective with acquisitions, preferring to build their own products, which I think is a good approach.  Acquire networks like Twitch or companies like Kiva with true hard-earned domain expertise, patents and hardware solutions - build the rest.


txlaw

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Re: AMZN - Amazon.com Inc.
« Reply #631 on: August 25, 2014, 06:54:46 PM »
This Twitch acquisition is a big effing deal.  If AMZN can turn Twitch into a real YouTube competitor, it will easily have been worth $1 billion (or whatever they're paying for it).

Liberty

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Re: AMZN - Amazon.com Inc.
« Reply #632 on: August 25, 2014, 06:56:31 PM »
Interesting. Amazon and Google will keep clashing more and more. It's inevitable for businesses that have a horizontal business model and are so big that only the biggest markets can move the needle.
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Palantir

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Re: AMZN - Amazon.com Inc.
« Reply #633 on: August 25, 2014, 07:40:58 PM »
I have always said that Google's biggest threat is a world where search isn't as relevant, and with that, they will seem far less impressive. Facebook knows who your friends are, Google knows what you search for, and Amazon knows what you buy....surely Amazon's data is going to be quite valuable.
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JAllen

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Re: AMZN - Amazon.com Inc.
« Reply #634 on: August 25, 2014, 07:48:36 PM »
This Twitch acquisition is a big effing deal.  If AMZN can turn Twitch into a real YouTube competitor, it will easily have been worth $1 billion (or whatever they're paying for it).


I don't know exactly how they're thinking about Twitch.  If they could make half as successful as YouTube that would be amazing.


I wonder if they'll take it that direction - non-game stuff that is. Not sure why they wouldn't though...

txlaw

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Re: AMZN - Amazon.com Inc.
« Reply #635 on: August 25, 2014, 09:15:29 PM »
This Twitch acquisition is a big effing deal.  If AMZN can turn Twitch into a real YouTube competitor, it will easily have been worth $1 billion (or whatever they're paying for it).


I don't know exactly how they're thinking about Twitch.  If they could make half as successful as YouTube that would be amazing.


I wonder if they'll take it that direction - non-game stuff that is. Not sure why they wouldn't though...

I don't think Twitch itself will necessarily become another YouTube.com, per se.  It could go that route, but maybe AMZN will just keep it a gaming brand.   

However, the underlying technology and infrastructure could definitely support a YouTube-like product, among other things, from AMZN.  For one thing, Twitch has a presence in strategic data centers located in the US and Europe so that they can deliver real-time video with high quality of service.  I could see AMZN bolstering this service to also deliver stored video from those data centers.  It's important to note that YouTube is more than just YouTube.com.  A ton of embedded videos on the web use YouTube/Google infrastructure because Google makes it really easy for video content creators.  AMZN doesn't offer a similarly compelling service, but with Twitch infrastructure, who knows.

Additionally, as I understand the service, Twitch broadcasts mostly come from end users.  That's very interesting because broadcasting from the home is a lot harder than broadcasting from conventional venues that have content owner broadband connections.  AMZN's purchase of Twitch could be a game changer if they "democratize" broadcasting.  (Btw, Twitch is a spin-off of Justin.TV, http://en.wikipedia.org/wiki/Justin.tv, which originally aimed to make it easy for normal people to broadcast or "livecast.")  And beyond broadcasting, I could see the video infrastructure being used for other things like IoT (will AMZN offer a Dropcam like service at some point?).

The possibilities are mind boggling.  Bezos continues to be one of my favorite CEOs on the planet.

One more fun fact:  I do believe that LVLT is a major CDN provider for Twitch. ;D 

muscleman

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Re: AMZN - Amazon.com Inc.
« Reply #636 on: August 25, 2014, 09:57:14 PM »
I've never really thought about AMZN in a relative-value way.  I think relative value is one of the less reliable valuation methods except for when there's a structural reason one stock is trading lower than comps., like tiny illiquid stocks trading cheaper than SEC-registered counterparts. 


I also think that AMZN isn't directly comparable to these other companies: AMZN is in many, much different, arguably better businesses than WMT/TGT/COST. AMZN's FBA revenue, however much it is, should be priced similarly to eBay's commission revenue (FBA is more capital intensive than eBay's pure commission model but is growing way faster).


But anyways, I've always thought about AMZN in an absolute way: how much will our sales and FCF be in 5-10-20 years.  I do think about AMZN's sales relative to WMT's current/peak sales and how much bigger they could be because AMZN is operating in more parts of the economy and sells orders of magnitude more SKUs.  But AMZN is structurally very different than WMT.


Chad from Peridot Capital rightfully pointed out that AMZN already has operating cash flow margins higher than the big B&M retailers which would make AMZN's sales worth more than theirs.  We know that not ever having to purchase sub-urban real estate, more automation and software driven makes AMZN less capital intensive so every dollar of sales should be worth more. 


Last thing: AMZN's gross margin this past quarter, 30.7%, just matched TGT's and is still expanding, so now it has gross margins that are higher than WMT/TGT/COST too.

Hi JAllen,
    I do agree that relative valuation is the least useful and I don't use it myself.
    All I am trying to do is to validate Nygren's words, but the calculation seems to be way off. Am I missing something here? Or is Nygren so dumb that he writes publicly about a company's valuation without verifying the most basic numbers?


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Liberty

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Re: AMZN - Amazon.com Inc.
« Reply #637 on: August 26, 2014, 05:51:08 AM »
http://www.theguardian.com/technology/2014/aug/26/amazon-fire-phone-sales-data

Estimate: 35,000 Fire phones sold. Looks like a flop so far.
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rogermunibond

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Re: AMZN - Amazon.com Inc.
« Reply #638 on: August 26, 2014, 06:23:40 AM »
The tech site Re/Code has an interesting take on Amazon's push into payment systems and credit card readers.  Hint... global domination of retail.  Insert Dr. Evil laugh....

http://recode.net/2014/08/24/predicting-amazons-secret-plans-in-physical-retail/

Palantir

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Re: AMZN - Amazon.com Inc.
« Reply #639 on: August 26, 2014, 06:55:54 AM »
I don't see it as crazy that stores will start running their system on these Amazon payment products like card readers etc etc. Amazon will continue to want to know what you are buying.
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