Tuesday, June 16, 2009
Jeff Bezos: Kindle Books and Readers Are Separate Businesses
In the future, Amazon.com’s Kindle e-book reader will display more book formats beyond its own.
In the future, Amazon.com’s Kindle e-book reader will display more book formats beyond its own.
Amazon.com is absolutely on fire. The company posted Q1 results that blew away estimates, with EPS of 41 cents a dime ahead of the Street, as both gross margins and operating margin expanded in the face of the worst economic downturn since the Great Depression.
Amazon.com Inc. shut like a book.
Domino’s Pizza Inc. was late but eventually delivered.
And CNN focused on the good news.
Shopping on cellphones–long a dream among e-commerce companies–is not yet a mass-market phenomenon. But some new tools could help change that picture.
Jokes dreamed up by tech companies for April Fool’s Day may not be spectacularly funny. But one can’t help but notice the level of effort put in, which sometimes seems to rival the intensity of their product-development efforts.
GameStop shares are getting clobbered today on news that Amazon.com is getting into the business of buying and selling used videogames–and so is Toys ’R Us.
Credit Suisse analyst Gary Balter explained in a research note today that one reason he has maintained an Outperform rating on GME shares is that the company has dominated the used videogame business; he notes that used games generate 44 percent of the retailer’s gross profits, nearly twice the segment’s sales contribution to the company.
Slowly but surely, Legg Mason has been easing out of its once gigantic stake in Amazon.com, formerly a favorite stock of Legg Mason portfolio manager Bill Miller.
In a filing with the SEC yesterday, Legg disclosed that it now holds 9,592,126 Amazon shares, down from 24,280,422 shares in its previous filing in October.
Best Buy shares are getting a boost this morning from a bullish note by Goldman Sachs analyst Matthew Fassler, who added the stock to his firm’s Conviction List. Fassler had upgraded the stock to a Buy rating in early January. He has a price target on the stock of $33.
Fassler expects the company to benefit from the demise of rival Circuit City.
Virtual worlds have had some real problems. Google, for instance, recently shut down an animated environment called Lively only five months after it was announced. And Linden Lab, whose Second Life online community was once front-page news, has neither reached many mainstream consumers nor created an important meeting place for corporate users.
J.P. Morgan’s Imran Khan theorized in a research note this afternoon that Amazon.com could eventually be a beneficiary of the demise of Circuit City, which earlier today said it would close all of its remaining stores and liquidate. Khan thinks Amazon could inherit as much as half of Circuit City’s online business.
The broad market is getting clobbered this morning in part by the extremely weak Commerce Department report on December retail sales–and investors are demonstrating particular zeal for dumping both Amazon.com and eBay.
The Street is suddenly concerned about pressure on gross margins at Amazon.com. The issue came up in two Street research notes this morning; while in the real world it takes three data points to declare a trend, I’ll settle for two.
It has become popular to say that the gaming industry has become recession-proof, simply because the overall sales for 2008 are up year over year…but those numbers only tell part of the story. Other sources are starting to report some troubling trends in gaming sales; not the least of which is the plummeting price of used games. These trends could lead to some troubling times for gaming in 2009.
Borders Group took itself off of the market yesterday afternoon, presumably because the company could find no buyers. Accordingly, the stock has taken a nosedive. That, combined with dismal recent numbers from Barnes & Noble, has intensified worries about the book-selling business as a whole–and about future numbers from Amazon.com in particular.
Are estimates still too high for Amazon.com (AMZN)?
Barclays Capital analyst Douglas Anmuth thinks so. This morning, he cut his 2008 estimate to $1.40 from $1.56; for 2009, he drops to $1.57, from $2.06. That puts his numbers way below the Street consensus of $1.51 for this year and $1.96 for next year.
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