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Comment by hyperbovine | Hacker News Reader

Apple of course prints money, far more of it than Microsoft, so I don't really see where this author is coming from. Amazon is more interesting; Amazon famously posts loss after loss, preferring to reinvest it all in R&D an infrastructure. It's on open question as to why their stock retains such a high valuation (see e.g. http://www.slate.com/blogs/moneybox/2012/12/12/amazon_s_zero...). I think the answer for most people (including myself) is that a) I don't want my Prime going anywhere and b) Jeff Bezos is a genius.

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Amazon has been operating at near breakeven point for a long time. Most of the years the make some money, sometimes they lose a bit.

Their stock holds up because they increase their revenue, and market share, at a huge speed. This is reasonable. In fact, that's what most startup companies do after raising Series A, B, C, etc. funding - they usually spend a lot more than they make (i.e. "burn" cash) with the goal to grow the market share as quickly as possible. Amazon is a public company with significant cashflows, so they use internal funds to grow.

Here're the latest approximate revenue/profits number from Amazon (all in billion):

2007: $14 / $0.5

2008: $19 / $0.6

2009: $24 / $0.9

2010: $34 / $1.1

2011: $48 / $0.6

2012: $61 / $(0.04) (loss of $40 million)

This is a very impressive growth (in revenue) for a large company. Having said that, one day it will stop, so by then Amazon will need to show impressive earnings, or its stock may get punished.

A very good point, although in the table I was able to find (http://www.streetinsider.com/ec_earnings.php?q=amzn) they've actually only reported two losing quarters going back 2 years, plus one that was 1 cent per share. 6 estimate misses, though, as many times as they exceeded expectations.

So it's clear they're not buying "traction" by grossly under pricing their offerings. So given that so many of us know for an absolute fact it's a well run company, and the obvious potential, if not likelyhood of becoming the next Sears and Roebuck (that was a good thing in my lifetime :-), well, they have a way above average story.

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