Is amazon com profitable
After some prominent industry experts commented negatively on the company from Chief Executive Officer Jeffrey Bezos, the price of Amazon shares fell by more than 19 percent, or eight dollars, to an annual low of 33.78 dollars. The market capitalization fell from a proud $ 60 billion to just under $ 12 billion.
Mary Meeks, an analyst at Morgan Stanley, said she was expecting a "moderate deterioration" in Amazon's sales over the next few quarters. com. Ravi Suria, a specialist in bonds at Lehman Brothers, described Amazon's convertible bonds as "extremely weak and shabby". Amazon spokesman Bill Curry disparaged the criticism as "nonsense" and stated that there is "not even the slightest risk that we will run out of money". Suria counters this by stating that the company has taken in around 2.8 billion dollars from investments and bonds in the past three years and at the same time sold goods for around 2.9 billion dollars. There are therefore doubts about the creditworthiness because Amazon has still not proven that it can turn sales into profit.
The company received support from Jeelil Patel from Deutsche Bank Alex Brown. He sees no cause for concern, since Amazon's debt is calculated. The company has cash reserves of $ 1.1 billion, which should be enough to reach profitability.
From the point of view of Patel, the decline in the share price is primarily due to the fact that Amazon.com is perceived by investors less as an Internet company than as a traditional trading company with the usual seasonal fluctuations in sales. Warehousing and logistics now make up 75 percent of Amazon's business.
Basically, the US financial world agrees that Amazon.com needs to become profitable - and as soon as possible. Wall Street is betting that the Bezos Company will achieve its self-imposed goal and enter profitability in the US book, CD and video business by the end of this year. The financial world is expecting generally black numbers for 2002.
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