When Does Frustrated Becomes Fed Up?
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For the past couple of years Amazon.com (AMZN) Chief Exexcutive Officer Jeff Bezos has told anybody who would listen that the company's ambitious expansion strategy requires it to invest now and think about profits later.
Of course, that's also his message to investors: Buy shares of the fast-growing but bleeding e-tail king now, and you will see a big return somewhere down the road when it becomes profitable.
But as Amazon.com's profitability continues to get pushed further into the future, many investors are beginning to wonder whether "when" should be spelled "if."
After announcing Tuesday that record revenues for the Q4 shopping season won't cut into the company's growing net loss, the market pounded Amazon.com shares, sending them down 15 percent to 69 3/4 at the close of trading. The stock fell some more Wednesday, trading at 67 1/8 in the mid-afternoon.
But in both cases the stock's stay in triple-digit land was brief, and its descent rapid, as investors focused with genuine concern on the company's ever-deepening losses.
Amazon.com's announcement this week was merely preliminary; Q4 results will be officially released on Feb. 2. Unless there's some good news in there that we didn't hear about this week -- like profitability for the company's flagship books division, which Bezos predicted last fall -- expect the market to deliver a double-whammy.