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