[burgers]

It isn't a ponzi scheme because Amazon isn't dependent on new share purchases to keep running. It is a fully functioning operation that is in the black. It just isn't generating any real profits above its costs.

Amazon is worth money right now. Just like a lawn mower doesn't turn a profit on its own, but it is still worth something.

In the long term view, which Amazon definitely takes, this current process is just there to fund the final business. Which is providing infrastructure. It uses its current operations as a way to fund the build out of that infrastructure. The future of Amazon, in my opinion, is not selling books etc, but providing someone with the infrastructure to sell books. Its using its current book sales etc to fund that build out.

[apalmer]

I am just pointing out that as a stock holder if the only value of buying AMAZON stock is that you expect that someone else down the line is going to pay you more to buy it than you paid for it then thats similar to how a Ponzi scheme works.

I dont think Amazon is taking a bad approach but, realistically feel Amazon is not going to produce any other return for its investors for the next ten years until it completely dominates the world market. Couple this with the fact that Amazon is not guaranteed to ever actually completely dominate the world market... its just unusual for a company to never return a profit after 20 years of business and investors are still hungry for the stock.

[gizmo686]

The big distinction is that Ponzi schemes have no end-game: they inevitably burst. Amazon has a well defined end-game (start to turn a profit), and there is good reason the believe that they will eventually do so. Assuming this eventuality remains reasonable, the stock will have some inherit value because someone will be willing to buy it today for the expected payout of dividends later.

[baddox]

> I am just pointing out that as a stock holder if the only value of buying AMAZON stock is that you expect that someone else down the line is going to pay you more to buy it than you paid for it then thats similar to how a Ponzi scheme works.

By that definition, literally every investment would be a Ponzi scheme. A savings account would be a Ponzi scheme.

[EliRivers]

literally every investment would be a Ponzi scheme.

Only the ones that you only expect to turn a dime on by finding a bigger fool to buy it from you. If the investment is something that returns money to you (for example, dividends), you're not expecting to make money by selling it for more. You're expecting to make money because you own a small piece of a business that makes money for its shareholders. I have a number of investments that I expect I will never sell (or at least, am not hoping to sell for more that I paid for it); I'm very happy just being given a nice share of the profits every year.

These investments do not require anyone else to buy in, ever; hardly a Ponzi scheme.

[baddox]

The definition now requires defining what it means to be a "bigger fool."

Many investments do not earn dividends, including ones that are widely considered to not be Ponzi schemes.