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RE: Is Amazon in a Bubble?
well I just look at history every time a company does the same thing with their p/e ratio and they immediately fix that which we will find out this October 25 with they come out with their quarterly data, because they might be even worse position than now.
Is your reasons on Amazon based more on faith and hope and emotion or like data on companies?
do you think amazon is just beginning its bull run or it will flatten out or might fall, because if it falls it doesn't have much support?
I guess a little faith and data.
Amazon is building about 100 Fullfillmet Centers worldwide, an airplane fleet, and I believe a 16 billion dollar purchase of Whole Foods. All these expenses cost billions of dollars, which I believe explains the small earning per a share and the weak quarter for them.
That being said, I agree under most circumstances their stock should be devalued and trade at a lower price. However, Amazon can't have their stock dip much especially in October because that is when Amazon does raises, promotions, and some bonuses. If Amazon's stock dips they would have to pay all their employees that are up for advancement more money because the stocks that the employees have aren't worth as much and Amazon would have to supplement the employee's compensation with more cash. Because Amazon at the moment is paying their employees by factoring in the stock price and saying, " Your 20 shares are worth about $20,000 so we only need to pay you another $60,000 to get you to $80,000/year. So I believe Amazon will most likely continue buying back their stock at a price that they find acceptable, even if they have to take a loan out to do it.
Therefore, I think Amazon will remain flat or may even dip a little. Like you said there is not much support for the stock price, but Amazon will have to support it for their own selfish needs. I personally would be thrilled if it dropped in October and I hope I am wrong because my girlfriend is up for a promotion and it would be nice if she got a higher salary.(haha)