No More Excuses For Amazon

Yesterday, when e-tail giant announced that it will lose money despite record fourth quarter sales of $650 million (US$), its stock price plummeted as much as 16 percent.

Still, tried to explain away the latest loss — which analysts estimate will be as much as 55 cents a share — by blaming it on larger-than-expected inventory costs.

You see, is claiming that it was “forced” to stockpile toys, electronics and other new products in anticipation of the holiday season.

Went All Out

“We went all out to make sure we delivered for customers this holiday season,” CFO Warren Jenson said in a statement. “As a result, our higher seasonal sales will not translate into lower net losses in the fourth quarter.”

So, when releases its official quarterly results on February 2nd, the company logo will once again be tinted with scarlet.

Time For Scarlet Letter?

Before yesterday’s announcement, shares had jumped 39 percent in the past year, in large part due to optimism about a strong holiday season. The stock has increased about 55 times since the company’s initial public offering in May 1997.

However, it may now be time for stockholders to take some drastic action to remind the top executives of that the object of running a business is more than increasing sales — it is about making a profit as well.

Perhaps Jeff Bezos and all the members of his management team should be required to wear a large red letter “L” on their lapels to remind them that the company is still losing big bucks every quarter.

When and if shows a profit, Bezos and his team could then hold a public ceremony where stockholders allow them to tear off the scarlet letters.

Dot-Coms Still Spin On

Meanwhile, also announced yesterday that it will show a fourth quarter net loss.

However, in a cutesy, dot-com spin, priceline pointed out that the loss will be narrower than its third quarter operating loss. That news must have been terrific for its stockholders, because the company’s stock price was up in late morning trading.

How Long Can Charade Continue?

Nonetheless, one wonders how long this charade can go on. If dot-coms continue to lose money, common sense dictates that investors will eventually lose their patience.

It is a dangerous game, because if a giant e-tailer like suddenly loses grace with its stockholders, it could precipitate a negative dot-com domino effect.

For that reason, I hope dispenses with the lame excuses and instead figures out how to become profitable by next quarter.

What do you think? Let’s talk about it.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

E-Commerce Times Channels