Facebook, Twitter, Amazon shares lose 23%, 8% and 3% in a day

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• Scruffy_Nerfherder@wolfballs.com ⁨3⁩ ⁨years⁩ ago

  Good

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• sj_zero@lotide.fbxl.net ⁨3⁩ ⁨years⁩ ago

  From an article about amazon from a few days ago: "A look at margins showed more ugliness with a big drop in both North American and Intl retail margins, both of which actually turned negative, and it was the AWS margin of just under 30% - the lowest since Q2 - that saved the company's overall profit margin. And perhaps most remarkably, if it weren't for AWS's $5.293BN in profit, AMZN would have a negative profit margin across its legacy operations."

  Recently I was having a discussion where I predicted something like this, that AWS is basically the core business and everything else is just a loss leader.

  I also predict that part of AWS is driven by massive spending on venture capital on all these companies ending up in Amazon's pockets, so in the coming year or two when liquidity starts to dry up, I expect venture capital to shrink, and Amazon will have a completely different fight on its hands because it will actually have to make a profit on being the world's largest online retailer.

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  • iamtanmay@wolfballs.com ⁨3⁩ ⁨years⁩ ago

    Everything else is a loss leader ON PURPOSE. They sell so cheap, they lose money, but no one can undercut them and they can take over EVERY market. Its a genius strategy. They can turn off the AWS spigot and fight fair and square like everyone else. But not doing so has a HUGE advantage

    Economies and negotiations of Scale. The bigger Amazon gets, the cheaper its supply will be

    So by sacrificing all their profits from AWS and legacy, they keep making themselves more efficient.

    Right now AMZ is the most transformative company on the planet, on par with SpaceX.

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    • sj_zero@lotide.fbxl.net ⁨3⁩ ⁨years⁩ ago

      Problem from my point of view is that realistically speaking, internet stores actually aren't super competitive unless you let them be a loss leader. The shipping and handling costs of an individual order are just so much higher than a brick and mortar store that the moment you need to compete, people go "Oh, that's sort of expensive" and go back to walmart.

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