Always jam tomorrow, never jam today worked just fine for the White Queen in Wonderland.
For Alice not so much.
From MoneyBeat:
For more than a decade, Wall Street gave Amazon.com Inc.'sAMZN -8.87% spending spree a pass. The company regularly reported quarterly loss after quarterly loss, yet strong revenue growth gave investors confidence the online retail giant was on the right path.
It doesn’t seem to be getting a pass any more.
Amazon late Thursday reported its largest quarterly loss in 14 years amid a surge in spending on new-product development, music and video licensing, and more. Even amid a 20% jump in revenue, Amazon reported a $437 million third-quarter loss, its biggest loss in 14 years.
Shares sank more than 7% on Friday and recently traded around $290, its lowest level of the year. The stock, which is down more than 25% this year, has now suffered sizable drops after each of its past four quarterly reports.
Analysts say investors are growing impatient and want to see the payoff from all the spending.
“We believe Amazon is shifting to the status of a ‘show me’ story as each time a margin inflection point seems to be in reach, it disappears,” B Riley analyst Scott Tilghman wrote on Friday.
“It is unclear how long the current investment cycle is going to continue, and the company has not shown any interest in driving even the tiniest amount of leverage off its sizable revenue base,” Colin Gillis, technology analyst at BGC Partners, wrote to clients on Friday.
Part of the quarterly loss was driven by a $170 million charge the company took on its Amazon Fire smartphone, which analysts say is selling poorly.
And the online retailer unveiled a cautious outlook for the current quarter, arguably its most important due to the holiday season....MORE
