Is Amazon going down the pan?

25 July 2014

amazoninstant More than $16bn just fell off the value of Amazon last night, as investors ditched it for failing to post consistent profits.

Amazon has been spreading itself around like a guy covered in Lynx in a Brentford nightclub, flirting with smartphones, investing in warehouses and ridiculous drones and spending money hand over fist – and it’s making a negative impact on their figures. As a result, the company has posted its biggest net loss for almost two years: £126m.

Shareholders have forgiven Amazon’s woolly headed approach to making a profit in the past few years, putting it down to the perils of running a mega international multi channel super corps. But with some now deserting the company, could cracks be starting to show?

It’s likely that this spendy trend will continue into the third quarter as Amazon announced it expected to post further operating losses of up to $810m.

But with the arrival of the Fire smartphone, Amazon is confident it can make it up.

‘We have a tremendous amount of opportunity,’ chief financial officer Tom Szkutak said: ‘While it’s impacting short-term results, we’ll obviously be looking to get great returns on invested capital.’

Unless their new smartphone and pay TV service is crap, in which case, maybe not...

TOPICS:   TV   Economy

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