Is Amazon.com Getting Desperate To Keep Cash Flowing In?

Amazon is desperate – its business strategy is spreading so in the end they will do a lot a businesses but not do them well.  – Observation from a long-time colleague of mine

Amazon announced recently that it is introducing a restaurant delivery service in Seattle. AMZN will deliver food orders from several area restaurants to AMZN customers.  The Company is offering free delivery to Prime members.

I know every city has more one existing company that specializes in restaurant delivery. Denver has at least two big ones and some smaller ones.  I’m sure has Seattle more than one as well.  The service is not cheap and the delivery personnel are well-paid.  This is a cash flow losing proposition for AMZN for as long as it offers free delivery to Prime member.

The catch here is obvious:  AMZN is trying to more Prime members who will pay $99/year upfront to reap the benefits – benefits Amazon admits to losing ten-figures on annually – that’s a couple billion dollars.   There’s also a 30-day free trial, which is great because you take advantage of the freebies – freebies which cost AMZN cash flow – when you know you want to buy a lot of products and then cancel.

“But I Thought Jeff Bezos Says That Amazon Produces Free Cash Flow”

AMZN has now implemented several “gimmicks” in the past year in order to generate cash flow into the Company.  We know that AMZN has raised $9 billion over the last three years by issuing junk bonds.  It has been furiously burning through that cash.   In fact, AMZN raised $6 billion in early December, 2014 and has already burned through $4.3 billion of that through June 30, 2015.

My AMAZON dot CON report shows in excruciating detail how and why this has occurred, despite all of the Company and financial media fanfare touting a highly misleading “free cash flow” number.   AMZN is literally bleeding negative cash flow.

I also show in fine detail – with guidance from a tech industry CPA who was tipped by an insider – how AMZN exploits GAAP accounting rules in order to hide the true cash expense of employment compensation.  This one could ultimately be the trigger that cripples AMZN financially OR cripples existing shareholders with a flood of equity dilution.

Finally, AMZN will be hit the rapid slow-down in consumer spending.   We’re already seeing a general decline in the revenues being generated by most companies in the S&P 500.  Now it looks like consumer spending is going to take a hit.   Per this Zerohedge report, Bank of America is reporting that its internal data, which tracks aggregate spending on credit and debit cards, is showing that consumer spending dropped again in August (what happened to back-to-school spending?).    From Zerohedge:

As BofA notes, “there was broad weakness in retail sales ex-autos and gas spending growth across metropolitan areas, with seven of the ten largest MSAs showing a monthly decline. The biggest monthly decline was in Dallas, followed by Miami and San Francisco. Both Dallas and San Francisco have experienced strong growth over the prior six months, showing a solid recent trend.”

AMZN will not be immune to this broad-based slowdown in consumer spending.  It also appears to be hitting what have been some of the hottest housing markets in the country.

While the path that AMZN’s stock takes in the short is highly unpredictable given that that it’s a big part of hedge fund algos, which follow the momentum being generated everytime the Fed halts trading in order to interfere with impending stock market sell-offs, I can assure you that AMZN is one of the most insanely overvalued stocks in the S&P 500.

My report on AMZN shows in detail why this is the case and why AMZN’s business model will eventually ponzi_schemefail.  It won’t hurt Jeff Bezos at all, because he’s milked the stock market for billions over the years with his Ponzi web of unprofitable businesses masked by highly misleading accounting and, perhaps, an unprecedented level of stock promotion hype from Wall Street drones and mindless financial media talking-heads (“meat with mouths”).

You can click on the link above or the pic to the right for access to my report:

 

10 thoughts on “Is Amazon.com Getting Desperate To Keep Cash Flowing In?

  1. I suspect Amazon, like Goggle, Facebook and the banks, is a systemically important enterprise to the crime syndicate running America and the world. The objective of these enterprises is to consolidate human behavior in their respective service areas so that at some point the hammer can fall and everyone will be at their mercy and under their control. They’ve pretty well succeeded with the banking sector and already dispensing propaganda supporting their plan to kill the last vestige of financial freedom by eliminating cash. Profitability is a nice perk, and ultimately necessary, but the powers that control these enterprises are far more concerned with market share and will keep the ponzi going as long as possible in the hope that it survives until they reach their objective of complete control over consumer behavior. There is no doubt that Amazon is a con, and in a real market environment it would be one of history’s best shorts. I guess I’ve just been so bloodied by the same control group’s ability to manipulate silver and gold into the dustbin or relics that I’m afraid to ever again bet against these satanic phuquers. What say ye?
    Neither a borrower nor lender be,
    I remain Polonius

    1. Polonius I have been having the same thoughts as you.

      Is this fucking crap somehowe systemically important in the same way Facebook is important for the government in order to spy on people?
      It seems like the PPT is keeping their hands under these profitless “systemically important” crap companies like Facebook, AMZN and others.

      It´s totally unbelievable that there could be one single normal person with 1/2 a braincell that could believe that Amazon is worth over 500 dollars.

      It´s also strange that the hedgefunds doesn´t get out of AMZN, if the tide turns quickly they are stuck in this insanely overvalued position.

    1. Real life result from Dave’s amazon report. I purchased the report and opened a position in Jan, 16 puts. The market turned against the trade and I added to the position. Monday two weeks ago I covered my trade. With the proceeds I now have a monster box of silver eagles, my investment back, and a new position in amazon puts. Thanks Dave and kistock you should pay attention and learn.

      1. Wow – a monster box of silver eagles plus a new position. Molto bene – bravissimo!!!

        Just remember to take profits it put options when there’s a sudden jerk down in the stock.

  2. Yes, Because for those whom understand we all know it is about “The Flow” new credit in…..other people’s stuff out…hmm how come i’m broke all the time? When you can sell stuff at a loss “forever” you can always borrow someone else’s money again and again and again and again……..getting bored yet?

  3. You know Dave there isn’t a Judge or Magistrate in the world who’s retirement plan is not tied to to investment in these ponzi plans’. This makes’ them fiduciaries, all by proxy of course “arms’ length old chap” That .gov has a monopoly on minting money is not the problem it is the “by extension” monopoly on CREDIT. Borrowers’ of last resort and all that bullshit. If they were just minting REAL MONEY. Companies’ like Amazon would not even exist .

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