patrick.net

I'm fascinated by their new "unstores". Talk about just in time inventory... the unstores have no inventory at the store, no cashiers (and, in theory) no lines. The customer shops before noon and pickups later in the day.

Unstores. Ha. More like "Unprofits".

I guess it is like going to the post office to pick up your package.

Also if Amazon is the leader in the cloud space and they are making so low profits-I wonder about the profits of cloud competitors? Is the whole cloud area just another massive hype like the dotcom boom?

justme says

Amazon.com Inc.'s stock AMZN, +1.43% climbed 1.5% in after-hours trade Wednesday, after the e-commerce giant announced a new $5 billion share repurchase program.

"Investors" are buying now so they can dump it during or after the buyback. And this improves the economy how? Ain't capitalism grand? Zero-sum games played on a massive scale.

justme says

My take: Jeff Bezos is getting desperate after the price fell from 696 peak, to as low as 474 recently.

He sees the stock price as cheap. It's not desperation.

EBGuy says

I'm fascinated by their new "unstores". Talk about just in time inventory... the unstores have no inventory at the store, no cashiers (and, in theory) no lines. The customer shops before noon and pickups later in the day.

That sounds like an over reaching abuse of internet domain over reaching on main street realm.

I hope it goes down in burning smoldering flames. I've already instructed my wife to never buy anything for our grand-baby from Amazon again. She bought her a walker and a stroller about 5 months ago. Both were broke with in two months of usage. The quality of their goods, are worse than Walmart and Kmart put together.
The walker actually collapsed while the baby was walking in it. A screw fell out of the soft cheap plastic that held the height adjustment clicker in place. Collapsed right under little feet twisting and mangling her legs. She was alright after a few minute good cry. But I wouldn't buy anything else from them again sight unseen. Unless it's a known model and make product and not some item you have no reference on what that product is. They are starting to build the case for retail showrooms. You really need to pinch and poke the merchandise before you buy. Or you'll end up mangling your grand-baby's laigs.

lostand confused says

Is the whole cloud area just another massive hype like the dotcom boom?

A large fraction of nationwide Cloud Computing services (like Amazon's AWS) are purchased by the so-called pre-IPO tech unicorns (1B+ valuation) like Uber. See

http://davidstockmanscontracorner.com/amazon-and-the-fantastic-fangs-a-bubblicious-breakfast-of-unicorns-and-slippery-accounting/

QUOTE: What now transpires is that upwards of 50% of that $7 billion of AWS revenue may be coming from Silicon Valley unicorns. That is, from companies that are buying cloud services with the proceeds of VC funding, not out of actual earned revenue.

According to a friend of mine, Uber is now paying $750 rewards for their drivers to recruit new drivers, because drivers are leaving in droves. A lot of unicorns are not doing well.

Related: Here are the list of the so-called Unicorn companies, Current Private Companies Valued At $1B And Above

https://www.cbinsights.com/research-unicorn-companies

Uber, Xiaomi and AirBnB top the list.

justme says

My take: Jeff Bezos is getting desperate after the price fell from 696 peak, to as low as 474 recently.

So far not desperate enough to actually try to increase his margin and make money.

justme says

I guess it is like going to the post office to pick up your package.

Yes, except it doesn't suck. (did you see the part about no lines).
Thanks for the links about AWS. I had never tied them to the unicorns.

Tenpoundbass says

That sounds like an over reaching abuse of internet domain over reaching on main street realm.

As there are no sales at the unstore, guess who doesn't receive sales tax revenue (unless there is also a distribution warehouse located in the same municipality).

lostand confused says

if Amazon is the leader in the cloud space and they are making so low profits-I wonder about the profits of cloud competitors?

Amazon is not really a capitalistic company working for its shareholders.
It is a kind of black star that tries to destroy entire industries by selling the same stuff with no profits.
That's what the cloud is all about: collapsing the margins on the technologies involved.

EBGuy says

Yes, except it doesn't suck. (did you see the part about no lines).

Fair enough, Amazon *may* be able to achieve that.

EBGuy says

As there are no sales at the unstore, guess who doesn't receive sales tax revenue (unless there is also a distribution warehouse located there).

Not so sure about that. Amazon always charges sales tax nowadays, and I think it goes to the cities by using the buyer zip code to determine who gets it.

@HS, There can be only one...

justme says

Not so sure about that. Amazon always charges sales tax nowadays, and I think it goes to the cities by using the buyer zip code to determine who gets it.

I remember reading at some point that Amazon warehouses are a tax bonanza to the city where they are located. This BOE reg seems to confirm:
Regulation 1822. Place of Sale for Purposes of Transactions (Sales) and Use Taxes.
b) PLACE OF SALE IN SPECIFIC INSTANCES
(5) OUT-OF-STATE RETAILERS WHO MAINTAIN A STOCK OF TANGIBLE PERSONAL PROPERTY IN CALIFORNIA. If an out-of-state retailer does not have a place of business in this state other than a stock of tangible personal property, the place of sale is the location of the stock of property from which delivery or shipment is made.

justme says

Amazon always charges sales tax nowadays, and I think it goes to the cities by using the buyer zip code to determine who gets it.

I just bought something from a third party seller who is not in my state, and I was not charged sales tax.

EBGuy says

I remember reading at some point that Amazon warehouses are a tax bonanza to the city where they are located. This BOE reg seems to confirm:

I guess what that means is that the warehouse is considered the point-of-sale, rather than the zip code of the recipient. Not good for local businesses.

Well, Amazon got a small lift from an upgrade by Nomura two days ago, and bounced up of 474 to about 507 at closing today. Always interesting to see that when a stock tanks, some corrupt analyst will step in with an upgrade.

So a $5B stock buyback program, and an upgrade with a price target of $750, could not ignite Amazon. I think that is a sign of further downward price pressure.

Oracle Chairman Larry Ellison is planning a head-on competitive assault on Amazon Web Services (AWS, cloud computing). That should get interesting. Amazon is unable to generate any signficant profits from their main e-commerce business. Instead they get most profits from selling AWS time to other web companies.

“AWS is more closed than an IBM mainframe,” Ellison said. “People are saying that is ridiculous. How can that be,” he said, adding that when IBM’s mainframes were the dominant computing power, companies like Amdahl and Fujitsu developed IBM mainframe clones that you could run your workload on. Ellison also backed his hyperbole with some prices and other data. He said Oracle’s recently released Exadata Express costs customers $175 a month, compared with Amazon’s database offering, Aurora, at $245 a month, versus Oracle’s own database running on AWS at $327 a month.

http://www.marketwatch.com/story/oracles-larry-ellison-has-a-new-target-amazon-2016-09-20

Jeff Bezos must be losing his marbles. Amazon is buying Whole Foods, the high price leader of groceries, for 13.7B. He is paying for the purchase with new DEBT for Amazon.

I'm speechless. This guy is insane. How is this going to make Amazon profitable? Whole Foods is already on a declining trajectory because people do not want to spend their Whole Paycheck (WF nickname) for some organic mumbo-jumbo.

justme says

Jeff Bezos must be losing his marbles. Amazon is buying Whole Foods, the high price leader of groceries, for 13.7B. He is paying for the purchase with new DEBT for Amazon.

I'm speechless. This guy is insane. How is this going to make Amazon profitable? Whole Foods is already on a declining trajectory because people do not want to spend their Whole Paycheck (WF nickname) for some organic mumbo-jumbo.

Wall Street disagrees.
"Insane" Bezos is now the world's 3rd richest man.

Wall St is crazy. A 3% pop in AMZN stock price because they are getting into the grocery business? That pop will not last. Owners of WFM stock made out like bandits, though.

Karl Denninger is comparing the AMZN/WFM deal with the AOL/TIme-Warner deal in terms of the magnitude of the foolishness and the resulting carnage in company valuation. He might just be right about that.

https://market-ticker.org/akcs-www?post=232138

S&P is placing Amazon on credit downgrade watch due to the 13.7B of new debt required to purchase Whole Foods Markets

http://www.zerohedge.com/news/2017-06-16/sp-warns-it-may-downgrade-amazon

I'm fascinated by their new "unstores". Talk about just in time inventory... the unstores have no inventory at the store, no cashiers (and, in theory) no lines. The customer shops before noon and pickups later in the day.

Wow-That is bad-why is their stock so high then? At least Apple, Google all have tremendous profits?

lostand confused says

Wow-That is bad-why is their stock so high then? At least Apple, Google all have tremendous profits?

Apple could purchase Cisco in its ENTIRETY with its cash alone.

Apple could do the same to Russia.

Amazon announces earnings one week from today, on Oct 26. The stock has now dropped two days in a row. Amazon is usually very successful at pumping their stock before the earnings announcement is made, using a series of well-timed (although often fluffy and immaterial) press releases that appear designed to create buzz about the company. But this quarter the usual recipe does not seem to be working. This could get "interesting".

So the motivation to be this way is gaining share of market where the margins are collapsed? This sounds like killing an industry so you can lead it.

Any comments on WTF are they trying to do really?

Amazon keeps dropping, down to 966 level a few minutes ago. Earnings report on Thursday after market close.

Unstores. Ha. More like "Unprofits".

"Investors" are buying now so they can dump it during or after the buyback. And this improves the economy how?