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by nuane
3372 days ago
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My understanding is that Amazon makes their money from aws, then builds their brand through their eCommerce site and other gadgets/projects. Those projects (like aws) have the potential to make bucko bucks, but as long as Americans income continues to diminish, the profitability of Amazon's core business will stall. But I agree that Amazon will become the first $1 trillion dollar enterprise, but after weathering another economic downturn. Amazon is the Walmart of today, and is ruthlessly out competing every retailer (retail is in a recessive state, and I'm wondering what happens when SEARS goes under). To throw a curve ball back, I do think Amazon is politically vulnerable. I don't shop with Amazon, and I tell everyone not to shop at Amazon. The company doesn't treat their average employees well, and should allow all their workers to form and join a union if they want. USPS is a great place to work, FedEx and USPS are pretty great too, Amazon is a garbage place to work--- |
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In any case, since a lot (I would say most) of Amazon's market cap is based on perceived value and growth of its distribution and ecommerce business, if the fundamentals aren't there to make larger profits long term, there's no way the stock can maintain its current valuation.
I do shop on Amazon a lot, because I live in a city where the convenience factor is too great to drive to a store, and believe all this in spite of that. I agree that their working conditions are awful, but unfortunately I don't think most people care when shopping. Wal-Mart has taken a lot of flack for that over the years and it hasn't slowed them. In fact it was only about five years ago that there was a best selling book about how Wal-Mart was taking over the world and had to be stopped at all costs. I don't hear that as much these days and in fact it seems that they are viewed as an underdog. Things can change very quickly.