In Focus: Amazon...(Again)
Thanks for checking out this week's In Focus, our look into a company, companies, or markets that made the Wall Street news cycle. This week we bring Amazon back in focus.
Blackmail, Scandal, and D!ck Pics!
Amazon's CEO Jeff Bezos released a blog discussing an attempt by American Media Inc.(AMI), the publisher of The National Enquirer to blackmail him. According to Bezos AMI has obtained personal photos of him and girlfriend Lauren Sanchez, including a d*ck pic. A decade into it and I've still yet to grasp the phenomena that is the d*ck pic. What do people get out of sending it? What do people get out receiving it?
The blog post was Jeff Bezos telling the world he will not be blackmailed or bullied. So what did the stock do? It did not perform well, it was down 1.6% on Friday in trading following the Bezos' post.
But What Will The People Say? When stories like this happen I'm never sure how people will react. Of course there will be people - who have been in his shoes - who will praise him for standing up to The National Enquirer. There will be others offended by the d*ck pick and what may be an extramarital affair. Will people buy Amazon stock and do even more shopping at Amazon as a show of support; or will people sell Amazon's stock and stop shopping at Amazon because they feel offended? I'm not bothered either way. He stuck up for himself, great! He may have had an affair, that's between him and MacKensie, it's none of my business.
Eye On The Prize.
Amazon reported revenue back on January 31, Bezos and Company beat earning per share estimates by $0.39 and revenue estimates by $520 million. The company made a half-a-billion dollars more in the forth quarter than Wall Street expected, A HALF-A-BILLION DOLLARS. The $72.4 billion of Q4 2018 revenue was a 19% increase over Q4 2017.
I'm old enough to have seen a few major companies run of growth come to an end, and today we're seeing several of the market's favorite growth stories be tested. The luxury electric vehicle space that Tesla has occupied by itself for several years is about to get crowed. Disney is attempting to challenge Netflix with it's own streaming offering. Apple's growth cycle that was attached to the iPhone appears to be slowing down. However, Amazon is still here growing at a phenomenal pace. There's still the healthcare and delivery businesses of Amazon that are in their infancy and should be able to contribute to the company's revenue growth in the future.
Don't Be Distracted.
Jeff Bezos's personal life isn't the only issue at Amazon. Woody Allen is suing the company for $68 million and the company is reconsidering it's New York headquarters due to local opposition.
No matter what happens with Jeff Bezos' personal life don't be distracted, keep your eye on the prize, Amazon's stock is still a Buy. Even with a lower than expected Q1 2019 guidance, many analysts still have Amazon's price target at or over $2,000 per share, that's a 26% increase from where the stock is now.
If Amazon sells off due to the battle between Bezos, The National Enquirer, and The White House (yes, they are involved), use it as a buying opportunity. We the people have a thirst for cheap goods and convenience and Amazon is our thirst quencher. Buy it while you can.
This is where I leave you with a Buy on Amazon. Good luck, may your next investment be your best investment.
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