by Dave Kranzler, Investment Research Dynamics:
Don’t take it from me, this is a comment that was emailed to me this weekend:
Druckenmiller thinks AMZN can raise prices anytime it wants. But its entire business model is based on price as a competitive advantage. The service is quick delivery, easy order. Well most of hte big companies have easy order on the web. Also easy delivery if you are willing to pay for it. So what’s the competitive advantage? AMZN has just about everything?
I use Amazon less now that they have to charge sales tax of 7% where I am and 10% in Chicago/Cook County. As we have discussed Amazon is losing that advantage.
I think there is a big issue of just what is Amazons competitive advantage? If it’s price–they have to attack a litany of companies, all with bigger and better balance sheets. That war could take a number of years. When do shareholders of AMZN wake up and see AMZN is not making money while Walmart is making money and pays a 3.3% dividend to boot?
This is what the stock chart looks like of a company that is in extreme bubble mode. Go back and look at the stock charts of every single tech stock at the peak of the internet/tech bubble. Need I remind anyone that the NASDAQ plunged over 90% when that bubble popped?
AMZN is going to go out of business, but its stock price has disconnected completely from the reality of its underlying business model. Stanley Druckenmiller erroneously and foolishly added rocket fuel to the stock move with assertions that were 100% incorrect. My updated report stock report goes over this in detail. AMAZON dot CON.
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