Certainly appreciate the well written editorial and perspective. I’ll have to disagree though on your ending summary points.
Jeff Bezos came from Wall Street, had millions of his own money plus millions in family money, and was well supported by large institutional investors. The model for Amazon never changed. It was always a dominion of domination.
Amazon uses Wall Street projections as a means to jacking up their stock price by said institutional investors as a means of:
Satisfying Wall Street’s insatiable need for returns in a post Financial Crisis world of 0% interest rates, and almost non-existent consumer savings
Increasing the value of their treasury stock to fuel vertical and horizontal acquisitions
Create a barrier to entry effect, in which new market entry considerations alone increase stock price value and dissuade competition
Fuel said recursion with new inputs and create the perception of having no base case
Amazon has made roughly ~$20B in Net Income over the last 15 years, half of which came from 2018 alone (large chunk of which came from only 1 segment), yet their stock price increased almost 3000%. Comparably, Walmart made ~$140B Net Income over the same period while the value of their stock increased by only 140%.
Amazon’s Model-Market fit is the same as Enron’s was. Pin it to your stock price and jack up the gross revenues to fuel projections to justify increasing stock prices to leverage greater market cap to continue said game.
Amazon isn’t breaking the law. Neither did Enron. Instead of Fastow creating various financial vehicles and companies to off load losses, Amazon uses new acquisitions to obfuscate their failures and as a means of infusing more growth projections which justifies (hides) colluded investment from large institutional investors leading to an organic supply and demand increase.
How else does a company that’s only made $10B in Net Income over 15ish years, buy all of the companies Amazon has bought, along with all of the companies in Bezos Expeditions?
The Amazon model is simple, never pay dividends, don’t collect sales tax, use said savings to fill the coffers and rely on capital gains to satiate investor returns.
Thankfully, Mackenzie just walked off with 25% of their shares in Amazon which puts her at ~4% ownership…just under the 5% threshold for reporting anything to the SEC. Jeff retained 12%, and is whittling that down nicely, having sold almost $3B in shares this year alone. (So Jeff can build rockets to leave this planet behind [not unlike…maybe exactly like, that guy from Contact. Where is Jody Foster these days?])
When Amazon does a 3-1 split in either Q4 2019 or Q1 2020, you’ll know it wasn’t their business model that made them “successful” nor the steady hand of their infallible leader. It was the fact Jeff Bezos is 100% Wall Street.
Doesn’t hurt that his grandfather was Lawrence Gise. Who was a Director for the Atomic Energy Commission and for ARPA; from which sprang ARPAnet the precursor to TCP/IP Internet and DARPA, the national defense agency. He’s simply an American aristocrat.
At least, that’s my take on it.