Ask HN: Where does Amazon get the money for growth investment despite losses?
Where does Amazon get the money to keep investing in growth if its making losses? Is it by just giving away more and more of the company as stock?
IS: http://finance.yahoo.com/q/is?s=amzn BS: https://finance.yahoo.com/q/bs?s=AMZN
EDITS: Note that they're really living off credit extended (not always voluntarily) by their suppliers: they have almost $17B in payables, and less than $4B in receivables. In other words, they're really slow payers.
Also, note that their payables are more than twice their inventory!
Consider a traditional bookseller, say Barnes and Noble, who has to invest in physical retail, holding product (books), and training staff BEFORE they can earn any money at all.
Amazon, on the other hand, takes customer money upfront as soon as they click buy. Then they can figure out their asset needs based on customer demands. Getting money upfront, Amazon can continue to invest it back into growth of the company. Presumably at some point they can "turn the switch" and lower their growth to earn more profits. But why not delay this until you're practically a monopoly? That's what will maximize shareholder value long-term. Perhaps more interesting of a question is how long shareholders are willing to wait. I suppose it doesn't matter as long as the stock price keeps rising.
Last Quarter (June 30, 2014) Amazon had a net loss of $126M, generated $862M from its operations, invested $731M in its business, paid off debt of $189M and only spent $17M of its cash and cash-equivalent assets.
To sum it up, AMZN only spent $17M beyond what they generated from operations, financing and investing.
http://yahoo.brand.edgar-online.com/displayfilinginfo.aspx?F...
Also, what other people said: changes in the balance of payables and receivables; stock-based compensation isn't a cash flow but is recognised as a cost; debt funding.
In general cash flow is not equal to profit, due to sometimes large differences in timing.