Tech IndustryMar 13, 2022
Amazonblitz7

AMZN stock split and buyback sounds desperate like GOOG, FB

Hi all, I’m a long term stock research enthusiast and have been following the last few earnings calls from tech companies. The way Amazon used their Rivian investment to overreport their earnings per share as ~$27 instead of ~$4 pumping up their stock to $3250 in Jan-Feb looked like a great selling opportunity to me. A few other observations/opinions: 1. They now decide to split their stock 20:1 before RSU lock. The last time they did a stock split was in 1999, 2-3 months after which the stock peaked for years. Stock buybacks also seem to indicate they are not able to find better investment opportunities or enter more domains or expand their warehouse network, business. Their P/E ratio is too high and their earnings and revenues are not growing at expected rates. The next quarter they will have to account for Rivian dropping hard since IPO and will likely show a big paper loss (first net loss in ~7 years). AWS continues to be their advantage over competitors like Shopify, Walmart in their low margin retail business. 2. GOOG did a similar thing (split stock 20:1). They did it because they could see the downturn coming. They DECLINED to provide next earnings forecast which already is a bad sign. Ads will slow down, Apple privacy policies don’t help, cloud is not so successful. GOOG has declined since their post-split hype high. 3. FB didn’t hide their earnings forecast for the ongoing quarter and got punished for slowing ad spending by businesses and peaking daily active users. Plus they have anyway not innovated in 10+ years and also cannot acquire TikTok or every new innovator. If not for WhatsApp and Insta, FB would have been long dead. Reels are relatively popular but can’t be monetized too well as per their own report. Their stock is now an all-in bet on the success of metaverse. If it fails, they might be the next Orkut. 4. It seems the hiring spree these companies are on, is at its peak and will only slow down from here. I feel FB was actually just the first shoe to drop (kinda expected), not necessarily the last. FB is the least diversified in its offerings among the big tech players. AMZN has also been more-or-less range-bound for 2 years and is falling now (which is as bad as, if not worse than, FB imo). 5. To be clear, I'm not saying they all will completely collapse but the truth is that growth companies often don't see it coming, and suddenly they get re-priced as giant value companies like Intel, GM, IBM. Technicals, fundamentals and the macro environment are all not conducive to rising stock prices. I’m kinda secretly hoping such negative sentiment pushes them up against Wall Street expectations but it doesn’t look likely. What do y’all think about tech companies especially AMZN?

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Google Mr. Pichai Mar 13, 2022

Sir this is Blind, not wsb

Amazon blitz7 OP Mar 13, 2022

But people do discuss investments here very often. Moreover, we are discussing the future of a significant chunk of your vested, current and future compensation (you might have heard of RSUs). I also talked about hiring trends in the tech industry and potential layoffs. Hope it gives you some insight which is not mainstream and very plausible.

Meta HastaLaVi Mar 13, 2022

Shut up Google. This post is very relevant.

Microsoft 2beeOrNot Mar 13, 2022

Your options are not mutually exclusive but you have provided radio buttons. I can see why Amazon has such a "great' UI.

Amazon blitz7 OP Mar 13, 2022

I'm not a frontend engineer, like many Amazonians here. Also, one could have made a mistake right? I didn’t see a checkbox option though. Now I can’t edit the poll. Plus I think I provided generic bullish and bearish choices and some company specific choices which should cover most viewpoints if not all. I welcome you to post your opinion here in the comments, and we shall see if people agree with your opinion.

Microsoft cheap_msft Mar 13, 2022

Amazon split was long due, and they were planning to do it in bear market, i say a wise move. Events you listed are co-relating right but as of now only inflation is playing solo role in market, company valuations are dirt cheap and will rise back again in a year once this “transitory” inflation goes down

Amazon blitz7 OP Mar 13, 2022

What makes it due? Can you share some resource where they said it will be done in a bear market?

Microsoft cheap_msft Mar 13, 2022

No one knows when bear market is done. But maintain stock price in bear market is good for employees and management to lower atteition

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Meta HastaLaVi Mar 13, 2022

Microsoft seems like the best play right now among big tech.

New
aBQg32 Mar 19, 2022

What about apple?

Microsoft Bkrf72 Mar 13, 2022

A basic qn, why buy back is a big deal? 🧐

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UdnH18 Mar 14, 2022

It signals that they have run out of ideas of things to invest in the business.

Microsoft Bkrf72 Mar 14, 2022

I see. Excess cache

ByteDance cegnffv Mar 14, 2022

How about Apple?

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aBQg32 Mar 19, 2022

Strong as hell

SAP ZedWolf Apr 7, 2022

How will the RSUs effect the new hires? Especially those who will get their stocks after the split? Will they get 20x the amount of stock?

Amazon #doodles Apr 8, 2023

Before I came to Amazon, I was a Prime customer and the company's biggest fan. I thought they did everything well. Now I have cancelled my Prime membership and would prefer to just drive to Walmart since I can be assured to get the merchandise as expected and on time. Internally I have noticed the decline in talent and wonder how much of the deterioration I see in quality, delivery, and customer service is evidence of broad decline of the company as a whole. Absolutely crippling bureaucracy and sweeping of politically inconvenient problems under the rug. Eventually, if occurring broadly throughout the company, that has to manifest externally to customers. Is that what we are seeing?