“‘Faith’ is defined as “belief without evidence.” AMZN is a stock investment that thrives on
investor faith. Investor greed transforms into irrational faith when the faith is rewarded with stock gains. This will ultimately burn out but it’s impossible to predict timing. The stock is trading at 178x TTM net income. This is an insane multiple for a company with a deteriorating business model that is under attack from all angles by large, well-capitalized competitors who specialize in Amazon’s business segments.
Having said that, I continue to believe that money can be made trading AMZN from the short side but it requires discipline and diligent capital management. Amazon is one of those stocks in which you need to maintain some short exposure because, when it finally goes, it will go quickly and you’ll be waiting for a big bounce to short that will never materialize” – excerpt from the latest Short Seller’s Journal
In last week’s issue of the Short Seller’s Journal, I did an in-depth analysis of Netflix’s (NFLX) accounting and demonstrated how NFLX manipulates GAAP accounting to manufacture fake net income. I advised subscribers to short NFLX on Monday at $188. This week I focus on the key areas of Amazon’s quarterly financials and show how Jeff Bezos transforms actual negative free cash flow into the Bezos $9.6 billion LTM “free cash flow.”
I also demonstrate the ways in which Amazon’s business model is beginning to break down – that it’s e-commerce model is under attack from all angles by well-capitalized, more profitable retailers like Walmart and its cloud computing business is being attacked aggressively by traditional software development and applications companies like MSFT, IBM, GOOG and ORCL.
On a year over year LTM basis, the amount of cash burned by AMZN has increased 89.2%, from negative $2.476 billion to negative $4.685 billion. – this seek’s Short Seller’s Journal shows why this statement is fact. Recently subscribers have cleaned up on Chipotle (CMG), Sears (SHLD), Beazer (BZH) and others. This week’s issue shows why AMZN will eventually be a home run short. You can learn more here: Short Seller’s Journal info.
I’d say Amazon is a bit light in the loafers, walking on faux water
Slightly dated but still relevant.
Great presentation. I stopped listening to Peter many years ago due to repetition, but he makes valid points here.
Dave’s financial analysis is to be applauded and it would be gratifying to see the AMZN stock price collapse. But I’m still not convinced that AMZN can be shorted like any other bubble stock like Tesla.
As Paul Craig Roberts recently wrote:
“….Wall Street is betting (on).. the collapse of US anti-trust law and regulatory authority .. still on the books but not enforced….(and) the ability of Bezos to….ensure that amazon.com will be an ***online monopoly***… .”
“.. Bezos’ cooperation with Washington’s spy network over all Americans is paid for by the CIA’s many front companies driving up the price of amazon.com’s stock …”.
Why should an intel front need a bottom line at all if its primary function is the transfer of cash?
PCR loved my AMZN analysis in my latest Short Seller’s Journal
AMZN will one day have the P/E ratio of AAPL or the P/S ratio of WMT.