After understanding Amazon's structural problems, I am pretty set on shorting Amazon. Reasons: (because of the 8th reason I know I can win shorting) 1. Big companies can almost never fight a true competitor. Their structural issues are too deep and fixing them leaves them worse off. 2. Amazon cloud has 2 big alternatives now with 3rd in pipeline. 3. Amazon talent is simply bunch of exhausted sloggers, I don't think they can become creative or work more. The stock is already stagnated from last 2 years and many would not want a prospect of another 2 years for no stock growth. 4. Jeff Bezos is out. All companies where founder left didn't survive more than 5 years without significant challenge rising up. 5. Stock is extremely overvalued, selling at huge P/E, while most of Amazon products are more expensive than identical products at other stores. 6. Walmart and target to compete fiercely in e-commerce. 7. Shopping is due for reinvention with OpenAI. Lazy slogger Amazon engineering managers are too dumb and courageous to innovate. They can hardly solve an easy leetcode. 8. Growth at all cost has left structural inefficiencies that are extremely difficult to realign and improve on, systems that can't easily to redesigned for cost reductions.
As you may well be aware, shorting stock is significantly more difficult than going long. Borrow costs + timing + leverage make short positions very difficult to win on even if you’re right on the general thesis. Exercise caution and good luck
No OP go for it and post screenshots!
WSB has entered the chat 😂
Sounds like a good way to go bankrupt. Recommend at least just taking out long term put options so you can cap your losses. Amazon is the modern marketplace and runs 80% of the internet. This affords them some serious strategic advantage.
Then take long position and compete with the short!
I am long Amazon.
🥱 sure .. I’d be interested if you had said this 12 months ago.
I am a "fake" investment guesser and I have been telling people to short tsla so far. Switching gears now!
I think short term it will have more to do with the looming recession but I like your odds. Don’t get greedy.
Yes, exactly! Coming out of this recession, Amazon will not be what it is now!
There will be a heck of a lot more competition. Price sensitive shoppers will discover Amazon suits stuff is pricier. Keep in mind, Amazon failed to compete in 2020 and 2021.
So far, we were looking for a proof hoping it can compete. But it failed to. So it's pretty clear it doesn't have the edge anymore. Since certainty is higher now, now is the best time because one can actually take a larger more meaningful position.
The stock is selling at 75 p/e! I don't think Amazon is going to survive another 10 years at top, forget about 75.
I agree with most of the points. There are two questions on my mind : timing - - Apple has been going strong despite not having the founder. When will Apple and Amazon crash? As mentioned by others Amazon is the leader in online retail. Competing with it is tough.
It's not leader outside USA. It's losing its leadership position inside USA.
> Apple has been going strong despite not having the founder IBM (Microsoft) PCs became dominant in the few years after Jobs was forced out of Apple. Almost put Apple out of business.
I am buying a ton of call options in Amazon for 2025. Looking to a min 5x my money. Let’s be here then and see who wins (wink).
Literally replace Amazon with Google in this entire post and you have the reason to short Google.
Very soon Amazon managers will be boasting how they did great work and now Amazon is going down and they are looking for a new gig.
Also, duration risk is real with shorting. How long are you planning to hold this short OpenAI won’t directly impact either Amazon or Google for several more years.
This is such an abstract post! Apple, Microsoft had founders step down, they still exist and thrive. Yes, Bezos ain't there, but Jassy has been with the firm for 20 odd years. He was Bezos' right hand man. He knows what he is doing. He just got unlucky taking over at a time when the macro collapsed on him. Even under Bezos, we had a massive near death situation in 2000-01. Your point that "Amazon talent is a bunch of exhausted sloggers" is so biased based on the news you hear. Yes there are many teams which are working really hard. But there are also several teams where it's a pretty good WLB. And I'd prefer having hard working employees than coasting employees. Amazon cloud has what is called first movers advantage and capturing the market. The success of the other clouds can be seen by the fact that GCP is losing money. Also, it's not as easy as commentators would make you believe about shifting between cloud vendors. Unless AWS screws up big time with the trust of customers, they will remain a cash cow for Amazon for a long long time. Some short term to medium term boosts 1. Current macro environment and the steps taken by Amazon will help reduce fat in the company. Conservatively, Amazon will save upto $1 billion a year by just the layoffs of 10k people (severance costs will impact short term though). 2. Across the company, there is a massive focus on sustainable and big cost reductions. I don't know what makes you think it's difficult, but it ain't. H12023 will see all major teams trying to reduce their infra costs. This would bring double benefit. Reduction in our opex, as well as reduction in capex for AWS. The hardware saved by cost reductions would be used to provide services for external customers. 3. Rationalizing big spends. Spending $1Billion on a tv show and spending billions on Alexa were vanity projects which are being tuned down. 4. Adversiting is growing leaps and bounds. Adversiting with Amazon is more lucrative than on Google for sellers. Will the stock remain under pressure? Yes, due to the growth concerns as well as fed rate hikes which may last till Q2 next year. But the company is solid. So, to summarize, please go ahead and short the stock if you want to feel the pain of losing money. Otherwise, this post is very abstract and biased which is the Hallmark of Blind anyways.
chatgpt generated responses! Welcome 😃
To your point number 2, yes they will try but they won't be able to reach needed reduction. Problem is years of growth at all cost ideology which left people making biased decision. Making systems faster than more efficient. Do you think 10 years of that can be undone by just 1 year of reducing infra cost? Just as people didn't care about cost but faster execution, the same way they will now not care about cost reduction but proving that they reduced, taking promo, moving on. Impossible to reduce cost now meaningfully without heavy long investment, and this is exactly what will make Amazon stagnant. You have to remove systems all together, but people will just put bandaid and prove work.
Positions or ban