Amazon Stock Down 3.7% — Split It Into Amazon Services And Products

Oct 29, 2021 8 Comments

Makes sense to split Amazon. Will be good for investors.

It’s time to break up Amazon. Amazon started out in life as a website that partnered with the physical world. As I wrote in my book, Goliath Strikes Back, when such partnerships fell short of Amazon’s order fulfillment targets, Amazon built warehouses and a logistics fleet to deliver goods in two or fewer days.

Along the way, it also built services businesses — including Amazon Web Services, advertising, third-party seller services and Prime subscriptions — that now account for over half of its revenues and the bulk of profits.

Here’s a way to give investors a chance to get back to that market-beating stock price growth. Amazon should split into two:

Amazon Services — which would hold the assets of its AWS, advertising, third-party seller services, and Prime Subscriptions units

Amazon Products which would give investors a stake in its physical product businesses.
While this won’t solve Amazon’s fundamental growth problem, it would give investors a choice of whether to bet on Amazon’s asset-light businesses — which appeals to my tastes — or its asset-intensive ones.

Amazon’s Two Bad Quarters Under Andy Jassy
Amazon founder, Jeff Bezos, handed off the CEO job to Andy Jassy at the right time. That’s because investors reward companies that beat analyst expectations for revenue and earnings growth and raise their guidance for the upcoming quarter.

https://www.forbes.com/sites/petercohan/2021/10/29/amazon-stock-down-5---split-it-into-amazon-services-and-products/?sh=2e487c242b1f

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