More On The Amazon Spin-Machine

Jeff Bezos’ greatest business trick is his ability to spin the illusion that AMZN is a money-making machine.  In fact, AMZN is remarkable  sales-generating machine,but it costs the Company more than a dollar to generate a dollar of sales.Bezos1

All of a sudden in 2015 AMZN had become a cloud computing services phenomenon.  The last two earnings report showed a rate of growth in its AWS business and the stock rocketed higher.  Of course no one seemed to care that outright the AWS business represents less than 10% of AMZN’s total revenues.  And of course nothing is ever mentioned about the quality of AMZN’s AWS-derived sales.

The truth is, and Bezos never discusses this, that the majority of AMZN’s AWS contract revenue comes from Silicon Valley unicorns.  Most, and maybe all, of them will not be around in a few years.  Here’s an accounting of this from someone besides me:

I would like to introduce a meme before the sell side or buy side catches on.  As you know AMZN was up 100% this year as Bezos revealed the AWS business to the world.  The meme is this: AWS growth is unsustainable.  Not only is it unsustainable I predict that the sell side forward revenue growth rate for AWS will  go to zero or negative by Christmas next year.   It has come to my attention that 50% of AWS growth comes from start ups and my guess is that the majority of those dollars are Unicorns.  AMZN has been an indirect beneficiary of QE largess.  The Fed’s easy money created a bubble in VC funded start ups.  That funding peaked this year and is now in decline as the Unicorn bubble is bursting.  I expect this bubble to unravel fast as we are in the part of the cycle where the capital markets shut down for companies burning cash.  –  AMZN:  The Ghost Of XMAS Yet To Come

My AMAZON dot CON report goes into further detail about the problems with Amazon’s AWS business modelAMZNnew and why, at some point, the market value being assigned to the part of AMZN’s business model will likely largely evaporate this year.

3 thoughts on “More On The Amazon Spin-Machine

  1. Outstanding reporting Dave I hope these news will spread.
    At the moment Grandma is purchasing 100 % of the shares from her democratic friend Bezos.
    Maybee she can sell these stocks later on and buy a golden wheelchair!

  2. This is from Joseph A:

    Though the French-proposed U.N. Security Council Resolution 1973 claimed the no-fly zone implemented over Libya was to protect civilians, an April 2011 email sent to Hillary with the subject line “France’s client and Qaddafi’s gold” tells of less noble ambitions.

    The email identifies French President Nicholas Sarkozy as leading the attack on Libya with five specific purposes in mind: to obtain Libyan oil, ensure French influence in the region, increase Sarkozy’s reputation domestically, assert French military power, and to prevent Gaddafi’s influence in what is considered “Francophone Africa.”

    Most astounding is the lengthy section delineating the huge threat that Gaddafi’s gold and silver reserves, estimated at “143 tons of gold, and a similar amount in silver,” posed to the French franc (CFA) circulating as a prime African currency. In place of the noble sounding “Responsibility to Protect” (R2P) doctrine fed to the public, there is this “confidential” explanation of what was really driving the war [emphasis mine]:

    This gold was accumulated prior to the current rebellion and was intended to be used to establish a pan-African currency based on the Libyan golden Dinar. This plan was designed to provide the Francophone African Countries with an alternative to the French franc (CFA).

    (Source Comment: According to knowledgeable individuals this quantity of gold and silver is valued at more than $7 billion. French intelligence officers discovered this plan shortly after the current rebellion began, and this was one of the factors that influenced President Nicolas Sarkozy’s decision to commit France to the attack on Libya.)

    Though this internal email aims to summarize the motivating factors driving France’s (and by implication NATO’s) intervention in Libya, it is interesting to note that saving civilian lives is conspicuously absent from the briefing.

    Instead, the great fear reported is that Libya might lead North Africa into a high degree of economic independence with a new pan-African currency.

    French intelligence “discovered” a Libyan initiative to freely compete with European currency through a local alternative, and this had to be subverted through military aggression.

    http://www.foreignpolicyjournal.com/2016/01/06/new-hillary-emails-reveal-true-motive-for-libya-intervention/

    https://www.foia.state.gov/searchapp/DOCUMENTS/HRCEmail_DecWebClearedMeta/31-C1/DOC_0C05779612/C05779612.pdf

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