Tag Archives: AMZN

AMAZON.CON – ROFLMAO

If this is the case, the true reality beneath Bezo’s fraudulent accounting had to have been horrific:

Amazon’s quarterly profit misses estimates, shares tumble

From Reuters – LINK:  

Amazon.com Inc reported a lower-than-expected quarterly profit on Thursday as expenses rose and the company provided a disappointing fourth-quarter revenue forecast.

The growth of AMZN’s cloud business is rapidly slowing down.  This has been one of my key arguments about the insanity of the market cap attributed to AMZN’s cloud business. It’s tiny compared to AMZN’s overall revenues.  And competition in the cloud space is going to become ferocious as Microsoft, Google and Oracle begin to really flex their muscles.

The only question left for me is to determine which between AMZN and TSLA is biggest Ponzi scheme in history.  AMZN is maybe a $10 stock and TSLA is likely worth $2.

Amazon Dot CON: The Bezos Con Grows With Revenues

The mainstream financial media headlines reporting Amazon’s Q2 earnings release were shamelessly pathetic:  “Amazon crushes Street forecast,” “Amazon beats again in Q2 thanks to cloud services.”  It was beyond nauseating.  The entire spectacle reminds me of the tech bubble, when companies like Cisco, Sun Microsystems and Intel would intentionally “guide” Street analysts into publishing a low consensus forecast the CFOs knew could easily be topped with accounting gimmicks.

Bezos applies all the traditional accounting gimmicks plus he’s created his own, Bezosspecifically with regard to his definition of “free cash flow.”

I don’t want to spend a lot of time on this.  I’ve wasted most of my evening untangling AMZN’s numbers as reported in its 8-K filing.  Let’s just say that if you dissect AMZN into its “product” and “AWS” components, the results are underwhelming.

Nothwithstanding the fact that AMZN intentionally guides the Street to low-ball estimates ahead of its quarterly earnings report, as you can see from the graphic below, which I created by dissecting and rearranging the sales and operating income numbers from AMZN’s 8-K filed today, AMZN’s growth numbers are underwhelming (click to enlarge):

Untitled

The sales growth rates for AMZN’s AWS (cloud computing) revenues and operating income are declining rapidly.  AWS is a new business started from scratch a few years ago.  Of course it’s going to show a high rate of growth initially.  But stock analysts and the mainstream financial media make it sound like AWS is a money tree.  Yahoo Finance reports that AWS is “massively profitable” LINK.

Well, look for yourself.  The sales growth on a year over year quarterly basis has dropped precipitously from 81.5% in Q2 2015 to 58.2% in the latest quarter. This is a rapid slowdown in growth.  The yr/yr quarterly growth rate for AWS operating income, which was $718 million in the latest quarter, has plunged from 407% to 83.6%.   “Massively profitable?”  You can see that AWS’ operating income actually declined from Q4 2015 to Q1 2016.  Declined.  Cloud computing services are not seasonal.  So that would not explain the drop.

Furthermore, AMZN does not disclose how much of its “technology and content” expenses are attributed to AWS.  But its total line-item cost for this in Q2 was $3.8 billion.  Yet, AWS’ total revenues for Q2 was $2.9 billion.  To be sure, a significant portion of that $3.8 billion in tech costs go with AMZN’s online product sales.  But it’s possible that none of the expense is amortized into AWS’ cost of sales.  Bezos won’t break that out.    He was doing a similar trick with “fulfillment” before the SEC forced AMZN to include fulfillment as a separate line item in the early 2000’s.

Let’s drill down into AWS’s numbers, to the extent that Bezos’ disclosures will allow:

AMZN AWS

The chart above shows the quarter to quarter growth rates for AWS.  Again, recall that cloud computing services are not seasonal.   From 2014 to 2015, AWS’ annual growth rate was 70%.  But on an LTM basis thru Q2 2016, that growth rate has collapsed to 26%.  With operating income the decline is even more dramatic.  From 2014 to 2015, operating income grew 182%.  But this growth rate on a quarter to quarter basis for Q2 2016 has plunged  to 19%.

Bezos is the master of deceptive presentation.  But as you can see, rearranging the numbers into a more traditional financial analysis format removes any “sizzle” Bezos imposes on the numbers and reveals that AWS’s growth rate is collapsing.

Circling back to the first chart, you can see that AMZN’s overall profit margin on 90% of its revenues base – its product sales – is more or less 2%.   This profit margin is less than half the profit margin of two of AMZN’s primary competitors, Walmart and Target.  In general, retailers produce 4-5% operating profit margins.  In other words, 90% of AMZN’s revenues significantly underperform that of AMZN’s competitors.

For this investors are paying a 186x trailing p/e for a business with a rapidly declining growth rate and profit margins well below average for retailers.

Finally, the Bezos’ shamelessly promoted Free Cash Flow metric  turns out to be borderline fraudulent.   In fact, buried deep inside the footnotes to AMZN’s SEC-filed 10-K/Q is a disclosure that states that the “free cash flow” number used in AMZN’s promotional slide is not a GAAP-derived number.

Why?  Because Bezos conveniently excludes the cash AMZN’s spends every quarter to pay for property and capital equipment that AMZN finances with capital leases.  He also excludes stock-based compensation, which turns out to account for about 50% of AMZN’s salary expense.   It’s highly misleading.   To give you an example, the very first slide which is shown in AMZN’s quarterly investor presentation is the  Bezos-concocted “Free Cash Flow” bar chart shown on a trailing twelve month basis:

Untitled

This is the very first slide Bezos hits the market with. Talk about shameless promotion, I’ve never seen anything like this in over 30 years of financial market experience. This is more absurd than any type of misleading hype that I saw in the junk bond market.   And I thought junk bond presentations stretched the limits of credibility.

But here’s the best part.  If you strip out the ongoing cash outflows used for capital equipment and building expenditures by AMZN each quarter for the last four quarters, that “free cash flow” of $7.3 billion LTM shrivels down to $2.5 billion.   THEN, if you net out stock-based compensation for the trailing twelve months, which is a GAAP number, that Free Cash Flow metric of Bezos’ disintegrates down to just $85 million.

Pundits will argue that capital lease payments are eventually non-recurring and therefore should not be included in a free cash flow calculation.  But that argument is entirely disingenuous and highly flawed because these payments have grown from $1.8 billion in 2013 to $5.4 billion on an LTM basis through Q2 2016.   I like to call these, sarcastically, recurring “non-recurring” expenses because it falls into the “non-GAAP” earnings category that every big corporation gets away with presenting now.  Bezos clearly stretches this to the limits of the imagination.

Now, Bezos’ promoters would argue that stock-based compensation is not a use of cash and therefore should not be included in the Free Cash Flow number.  But that is patently false.  Here’s why.  The definition of free cash flow is that amount of cash flow that is available to shareholders after all cash payments are accounted for.  With stock-based compensation, AMZN hides this cash-cost to shareholders because this economic cost to shareholders does not show up until the employee registers its shares and sells them.  This increases the shares outstanding – or dilutes shareholders.

Employee stock compensation shares are registered and sold every quarter.  The amount per quarter is increasing at an increasing rate because the nominal amount of shares given as part of AMZN’s payroll increases every quarter.  Thus, the amount of shares outstanding at the end of every quarter increases.  This effectively reduces the amount of free cash flow per share that would otherwise be available to shareholders. Therefore the cost of employee stock compensation should be treated as cash cost each quarter and should be netted out from “free cash flow” just like it would be if the employee compensation were paid in cash instead of shares.  

There are several other areas in which Bezos uses creative accounting in order to bamboozle the market.   Unfortunately Wall Street, Capitol Hill and the SEC look the other way.  Wall Street because AMZN is a perpetual source of revenues.  Washingon, DC because Bezos spends millions buying Congressman and because has the use of the Washinton Post as political weapon.

There’s no way to know when the AMZN Ponzi scheme will collapse.  They all do eventually.  But I can say with certainty that, perhaps other than Tesla’s Elon Musk, Bezos is the greatest Ponzi scheme operator in history.

World’s Most Speculative Mania?

The western media – especially any mainstream U.S. news source – has made it a habit to blame the world’s problems on Russia and China.   The U.S. economy is aces – when the U.S. stock market drops it’s China’s fault.

Bloomberg published a report yesterday which presented China’s commodities futures market as the world’s most speculative mania:

What started as a logical bet — that China’s economic stimulus and industrial reforms would lead to shortages of construction materials — quickly morphed into a full-blown commodities frenzy with little bearing on reality.  Bloomberg News

But let’s put China’s commodities trading frenzy in the context of the stock that I estimate is the biggest corporate Ponzi scheme in U.S. history:

Untitled

Untitled1

AMZN trades at a trailing GAAP p/e of 562x.  I use the term “GAAP” here quite loosely because there’s GAAP and then there’s Jeff Bezos GAAP.  It trades at 23x book value, 30x tangible book value and 40x EBITDA.    Bezos claims that AMZN threw off  a couple billion in “free cash flow” for Q1.  Yet, if this is a provable fact, how come AMZN’s cash balance declined $3.4 billion from the the end of Q4 2015 to the end of Q1 2016?   Someone is not telling the truth…

It did not hit me until this morning (this was well before the Zerohedge article reporting a similar concept later in the day) that the reason the SEC and Congress do not open an investigation into Amazon’s accounting is because Jeff Bezos owns the Washington Post. That’s a very powerful weapon to dangle in front of a Washington, DC politician or bureaucrat.

AMZN stock hit an all-time high today because some chode from a Wall Street bucket shop issued a “buy” with a price target of $1,000.  The analyst did not have any specific fundamental reasons for why the stock was worth $1,000/share.  But then again, I’ve never seen anyone besides this blog and a few others attempt to hold these Wall Street hand-puppets to any reasonable degree of accountability.

The Bloomberg article references the the Dutch Tulip bulb mania of the 1600’s and the internet bubble of the late 1990’s in the U.S. when referencing the frenzied activity in the Chinese futures markets.   How convenient for Bloomberg to overlook that the fact that the greatest investor fraud of all-time is domiciled right here in America.

Yes, I suppose just like Bloomberg’s assertion that Chinese commodities futures “started off as a logical bet,” at time in its infancy as an online book reseller Amazon’s stock was a logical bet.   But fueled by Fed money-printing, regulator-enabled fraudulent accounting and extreme investor greed, Amazon stock is the embodiment of a financial system that is completely corrupted to the core.

The Latest Short Seller’s Journal: The Greater Fraud Contest

The stock I feature in the latest issue of the Short Seller’s Journal was down 3.5% today. The company’s revenues are highly correlated with the GDP,  which is going negative rather quickly.  This stock easily has another $20 of downside by the middle of the summer, which would be another 33% from here.

Icahn has always been one of the shrewdest investors out there. I doubt he’s betting on anything less than a 35-50%% decline. The SPX could drop 50% tomorrow and still be overvalued. Based on historic GAAP accounting and historical valuation metrics, the S&P 500 is intrinsically worth 500-800.

I am working to determine whether TSLA or AMZN is the biggest stock fraud in the history of our markets. Both companies aggressively implement the same business model: charge the end-user (buyer) a price below the all-in cost of getting the product from the factory floor to the customer’s possession for the sake of generating revenues.

AMZN stock has run up $72 to $673 (Friday’s close) since its earnings were reported last Thursday. The Company continued with the same highly misleading accounting in Q1 2016 and the misleading presentation of its numbers that I layout in Amazon.con.  AMZN burned through OVER $3 billion in cash during Q1 2016 despite making the claim that it generated $5 billion of free cash flow.

Of all propaganda-promoting publications, the Wall Street Journal featured a story last week which outlined the ways in which Elon Musk (TSLA founder) moves around cash among TSLA, Space-X and Solar City, depending on which entity recently raised money and which entity needs money. Pure Ponzi scheme.

TSLA is now down over 6% from when I originally recommended shorting it on March 27, despite the fact that SPX is slightly higher. I reiterated the recommendation in last week’s Short Seller’s Journal issue – it’s down 17% since then.

The S&P 500 is getting ready to roll over again and edge off the cliff.  It’s not a question of “IF” but a matter of “WHEN.”  In the latest Short Seller’s Journal I present three great short ideas, including a not well known company who’s revenues are highly tied to GDP activity. This stock could easily shed $30 over the next 3-6 months.  Subscribers to the SSJ gain access to the Mining Stock Journal for half-price (and vice-versa).  You can access the SSJ by clicking here:  Short Seller’s Journal.

Untitled

Jim Cramer Needs To Be Shut Down And Investigated For Illegal Stock Promotion

“No! No! No! Bear Stearns is not in trouble. If anything, they’re more likely to be taken over. Don’t move your money from Bear.”  –  Jim Cramer on CNBC’s “Mad Money” on March 11, 2008.

Three days later, on March 14, Bear Stearns stock plunged 92% after it was taken “under” by JP Morgan.

Today Cramer has made the claim on CNBC that “a lot of the bear markets have ended since February 10.”  According to Cramer, apparel, restaurants, iron ore and machinery groups are now in bull markets.  “C’mon in retail  stock trading minnows, the water is nice and warm.”

This assertion is just ludicrous.  For starters, we know from hard industry data released a little over a week ago – LINK – that the service sector – i.e. restaurants and retail-oriented businesses – are now shedding employees.  If a new bull market in consumption were born, service businesses that rely on middle class disposable income expenditures would be hiring, not firing.

Clearly Cramer completely neglects the fiduciary duty to conduct appropriate due diligence before issuing investment advice.   Because if he actually rolled up his sleave and did some work, he would have found the middle class is sinking in a sea of debt.  Sorry Jim, imminent personal bankruptcy is not conducive to disposable income-based consumption.

Currently a proposed rule issued by the Department of Labor would raise the bar on the investment advisory industry’s standards of fiduciary duty. “Fiduciary duty” is a legal duty to act solely in another parties’ interests.  Naturally Congress, funded by CNBC and Suze Orman, Inc are working overtime to oppose this rule.

Using the Bear Stearns case as an example, Cramer was advising his viewers to hold their Bear Stearns stock.  But was he acting in the viewers’ interests?   More likely, Cramer’s hedge fund cronies were busy unloading their positions in Bear Stearns as quickly as possible before that Titanic hit the iceberg.

I did an analysis of Bear Stearns in January 2008 and concluded that Bear was technically insolvent.  I shorted the stock in the low $80’s and managed to cover in the $30’s.  Cramer is a complete idiot if he truly thought Bear Stearns was a viable going concern.  In the absence of a willingness to believe that Cramer is a moron given his educational background,  the obvious conclusion is that Cramer is exceedingly corrupt.

What will it take for the Justice Department to investigate Cramer and all of his off-CNBC dealings?  My colleagues and I have known for well over a decade that Cramer is little more than a front for the hedge fund community.  Cramer is the Wall Street version of Hillary Clinton.  He’s gotten away with committing egregious crimes for so long that he likely  is unable to differentiate between legal and illegal.  Rule of Law, what’s that?   Cramer should not be on CNBC issuing pump and dump recommendations, many of which end up badly impaling retail stock investors.  Instead, Cramer should be busy defending himself from a bona fide SEC/Dept of Justice inquiry into his operations.

Cramer also pumped up the infamous “FANGS”  today.  He singled out AMZN just because Piper Jaffray and Wells Fargo both said AMZN was “doing much better than people think?” Based on what, Jim?   “Fiduciary duty” is not defined as parroting comments issued by retail brokerage firms who’s business is predicated on selling overvalued stocks to retail pigeons.

AMZN stock has been up as much as $9 today because of Cramer’s pump and dump call plus the fact that AMZN debuted its online streaming fashion show to promote its new clothing line.  Hey there’s an original idea, use the broadcast media to stage a mock fashion show in order to sell clothing.  Why didn’t QVC and Home Shopping Network think of that?

If AMZN’s clothing line business is like nearly every other business line of AMZN’s, it will sell it’s clothing for less than the cost of producing and delivering the product to the end-user.  QVC trades at a 13 p/e.  If AMZN does not make money on its clothing business, at what multiple of zero should AMZN’s clothing business be worth?  Currently AMZN’s $9 Cramer spike has melted into a loss of 23 cents.  Did you get some of your buddies out on that, Jim?

For original analysis and long term and short term short-sell trading ideas, check out the Short Seller’s Journal.  Last week several subscribers made between 50-200% on a “quick hit” short sell trade idea on Big Five (BGFV) that I emailed out them on Monday mid-day. (click on image to subscribe)Untitled

 

The Writing Is On The Wall: Latest Issue Of Short Seller’s Journal Is Up

It’s been estimated that at least a third of the 175 oil producing companies in the U.S. are at risk of slipping into bankruptcy this year. At some point banks are going to have to start foreclosing on defaulted loans and many companies will be forced to liquidate. Shell Oil announced this past week that it is exiting its North American shale operations. The writing is on the wall. This is going to inflict a significant amount of damage to the U.S. economy – an amount of damage that is not yet being anticipated by investors or by the policymakers.  – the February 28th issue the Short Seller’s Journal

This week I feature a two stocks that can treated either as a “quick hit” or positioned as a long term short. I’m also going to include a highly undervalued silver mining stock as a “contra” stock market idea. For new subscribers, because the precious metals sector tends to move inversely to the stock market, going long mining shares is similar to shorting stocks.

I also review some strategies for using puts to either speculate on a big move lower or replicating a longer term short position in AMZN – see AMAZON dOT CON.

You can subscribe by clicking on this link – SHORT SELLER’S JOURNAL – or on the image below.  Subsribers to SSJ will be able to subscribe to the Mining Stock Journal for half-price.  The debut issue should be out this upcoming week or the following week at the latest.

Untitled

AMAZON dot CON: Find Out Why The Stock Was Slammed After Q4 Earnings

A reader reports: Hi Dave, I’m in the Amazon puts with 300 strike price that I bought on Jan 17 before they reported earnings. I’ve made $7500 on the trade. Also I read that you think silver is the play of the decade! I’m going to take those profits plus $2500 and buy a box of silver eagles and put the rest of my capital from the put trade back into more AMZN puts!  Thanks!

NOTE:  AMZN has run up over $40 since its post-earnings slam.  Of course Jeff Bezos being the consummate stock market operator announced a $5 billion share buyback. He’s attempting to push the stock back up because he dumps shares every month and, more important, when AMZN drops back to earth (i.e. below $100) he’ll have a cadre of pissed off employees who agreed to take a high percentage of their salary in restricted stock units (RSUs).  At today’s current price, Bezos has paid out close to $500 million worth of RSUs at much higher stock prices.   Imagine thinking you are getting paid $100k but when you go to sell your stock, you find out that your salary during that time period was really $25k…My report explains these RSUs and shows why AMZN is the biggest Ponzi scheme in the modern era…

I’ve updated the AMAZON dot CON report and show what was in the numbers that triggered a $190 sell-off in the stock.  I’ve also updated the section of the report that outlines using calls and puts to short AMZN.

AWS will be one of the first cracks of the glacier but what will bring the whole thing down is when that RSU payment scheme unwinds itself.  Most analysts are overlooking one of the biggest accounting schemes at AMZN in the history of any large public company:  how they pay a good chunk of base salary in RSUs and walking through what that means. That is going to be a day of reckoning for the business school case studies.   – a contact of mine who is a former Silicon Valley insider that specialized in tech company accounting

My report details AMZN’s Restricted Stock Unit accounting scheme and the ramifications for this Ponzi compensation scheme when the stock engages in bona fide price discovery, i.e. tanks hard.  You can access this report here:  AMAZON dot CON

Another Huge Reason To Short AMZN – The Perfect Contra-Bill Miller Trade

First of all, regard this as a warning to get your cash out of any funds at Legg Mason that are touched by Bill Miller.  The last time Miller was this bullish on stocks and AMZN, the S&P 500 collapsed from 1550 to 700 in 17 months.

Miller bills himself as a “value” investor.  Yet, currently he has the pools of money he manages at Legg Mason 10% invested in AMZN.  This just in, Bill, any stock that trades at a 425x earnings, 2.5x sales and 19x book definitionally is not a value play.  Miller’s current highly disillusioned view on the stock market can be seen here:  LINK.

Bill Miller’s claim to fame was beating the S&P 500 11 years in a row – until 2008 hit.  He did this by making highly concentrated bets in the hot financial sector stocks, homebuilders and hot momentum stocks like AMZN.  Nothing complicated there – certainly nothing Miller should have been earning $10’s of millions in fees on – go to the Blackjack table with the hot shoe and bet everything in your pocket on every hand.  Of course, eventually the shoe turns ice cold and the dealer wipes you out, quickly.

Fast forward to February 2009 and Miller had one of the worst 10-year track records in the industry.  He should have been investigated and barred from the industry.  Instead, he’s back to his same old tricks with a 10% bet on AMZN.  His fund at Legg Mason is down 20% for the month of January.  By the end of the year, I predict that all of the gains he may have achieved over the last 5 years will be wiped out and his investors’ accounts will be incinerated.

If anyone wants to understand why Miller’s position in AMZN is the ultimate example of reckless money management devoid of proper due diligence, you can see the truth in detail in my Amazon dot Con report.   I’m working on the 4th quarter numbers and will soon have an update, which will be available to everyone who has bought the big report.

short-sellers-journal-header

The weekly issue of the Short Seller’s Journal has been released this afternoon.  This is my best issue yet and includes an options trading resource (emailed separately).  I have identified a short-sell idea that takes advantage of a highly leveraged company exposed to a highly cyclical industry and has significant exposure to subprime counterparty risk.   I also have a leveraged energy sector “Quick Hit” play to take advantage of what appears to be yet another rumor-driven short-squeeze move in the price of oil last week.

Finally, I have some preliminary comments for subscribers on AMZN’s earnings report.   Every quarter I seem to discover more problematic aspects to AMZN’s business model.  By the way, as predicted, the growth in its cloud computing sales – the so-called AWS buiness – are starting to show signs of slowing down.

Click here or on the image above to subscribe:  SHORT SELLER’S JOURNAL

Thanks for putting together an informative report with actionable ideas. For years I have stared in stunned disbelief as the rigged up, QE inflated stock market kept defying gravity but it looks like the chickens are coming home to roost now. With the ideas you provide, I hope I can take advantage of the coming downturn with some profitable trades.

They Don’t Bother To Hide The Criminality In Silver And AMZN Trading

When they’re trading 1.5 billion oz. of silver each day in London, the ‘silver’ fix each day is a complete sham. Now the fix has been found to be openly manipulated, it will be interesting to see what happens with the London silver market. – David Jensen, “Silver: Is It The LBMA’s Greatest Rig?”

Strange things are happening in the global financial markets.  Most likely evidence of a massive systemic earthquake starting to shake.  As many of you know, the LBMA price fix “fixed” the a.m. priceUntitled of silver 84 cents below the front-month futures price right before the price was “fixed.”   This graph to the right shows how the criminal activity went down (click to enlarge).

I awoke this morning and had an email from Bill “Midas” Murphy asking me if the $13.98 low print shown on Kitco was correct.  I responded that it looked like there were some “low hanging” stop loss orders that were attacked in an attempt to get the price of silver down.  This was before I had learned of the crime committed on the LBMA.

I would love to have an explanation from the committee in charge of overseeing the LBMA fix.  The fact that paper silver bounced back almost immediately is evidence that the a.m. fix was a fraudulent act in its entirety.  But for what purpose?  The price fix is supposed to be the price that balances out the amount of physical silver bars being offered for sale and bid to purchase during morning trading.

The entities selling silver on Thursday morning didn’t just get their faces ripped off, they had their entire head decapitated.  These are the entities who should be pressing for investigation.  It’s money out of their pocket or their clients’ pockets.

This was my final comment to Bill on this matter:   The insider elite are laughing at everyone spending so many calories and so much energy reporting, discussing, analyzing and agonizing over the paper vs. physical issue.  Meanwhile the biggest theft in history is taking place right under our nose as they pluck every ounce of physical gold and silver out of the system from the idiots and the idiotic mining companies who are willing to sell it at the paper price levels.  The biggest wealth transfer mechanism is the Central and bullion banks.  The banking system has been ripping us off in every aspect of our lives for decades. Why on EARTH would anyone question or doubt that they’re ripping us off in the precious metals market? Seriously. Everyone in their heart of hearts knows that gold/silver are the ultimate root of any monetary system.  Why would the banks rip us off using paper currency schemes and not touch the metal?  For God sakes, the metal is what they’re ultimately after.  That’s why the first thing any military does when they take over a country is it takes the gold.  The most recent proof of this Ukraine.  That practice goes back to at least the Romans.

Someone sent me an excerpt from Ted Butler’s “news” letter in which he rationalized away the reason why the registered gold vault account at the Comex was so low now.  Bill, I seriously think he was on LSD when he dreamed that one up.

I guess what’s most troubling about the above incident is the blatancy with which the LBMA crooks implemented their crime.  They made no attempt whatsoever to cover up the crime scene.  It’s almost like they’re taunting us.

This brings me to the issue of AMZN’s trading today.  AMZN stock ran up $52, or 8.9% ahead of its quarterly earnings to be released right after the NYSE close on extraordinary volume of 14 million shares – 2.4x more than its 10-day average daily volume.   After the market closed, AMZN’s stock plunged as much at $95 from the close on a disappointing report.  It closed out the after-hours session down $85.

I bring this up because there is no question in my mind that the stock was likely run up by one of the hedge funds with a big position in the stock (or possibly two or three in collusion).  The purpose of this would be to generate a frenzy of buy activity into which the hedge fund could unload a chunk of stock.  This also implies that one (or more) of the big funds was given a “heads up” from inside AMZN about the nature of the report.

The reason I am convinced this is what happened is because I was part of a junk bond trading operation in which this occurred all the time.  Back then we had to be more careful because laws were actually somewhat enforced, sometimes with vigor.  But if I had a big position in say, Trump Casino bonds,  occasionally I would get a tap on the shoulder from one of the Trump bankers in corporate finance who would whisper, “uh, I don’t like your Trump position.”

In present times, the laws and regulations designed to prevent/discourage insider trading are rarely, if ever, enforced.  Insider information sharing is almost as blatant as the London silver price fix today.   Of course, I have zero sympathy for any of the idiots who chased the stock higher today.  Anyone who goes near that stock without doing extensive analytic work will get what they deserve.  Some of these big hedge funds who have massive AMZN positions are eventually going to get impaled on their holdings (or at least the pensions they manage money for will).  Here’s an example of one of the retail trading oriented dopes who was giddy about AMZN stock before it reported – Timothy Collins of TheStreet.com’s Real Money:  I’m Bullish On AMZN Ahead Of Earnings.   Nice trade, Tim.

Speaking of AMZN’s numbers, I will hopefully get around to updating my AMAZON dot CON report with the latest information sometime in the next 5-7 days.  If you have already purchased the report, please email for the update.  If you have not yet purchased the report but have thought about it,  I am going to raise the price again (it takes a lot of time and energy to work on this Company’s numbers) once the full research report is published with the update.

Today’s after hours action was just the start of the AMZN bubble deflation process.  I don’t know what path it will take, but I know that AMZN’s stock will eventually fall from the $550 after hours close today toponzi_scheme below $100.   To be sure, there will be periods of time when the stock moves up sharply because Jeff Bezos is the king of highly misleading stock promotion and there’s plenty of idiots out there who lap up his drool with blind greed.  My stock report will help you understand why AMZN is one of the world’s greatest Ponzi schemes.