Tags: Jeff Bezos | Amazon | nonprofit | charity

24/7 Wall St.: Jeff Bezos Operates Amazon Like a Charity or Non-Profit

By    |   Friday, 24 October 2014 12:46 PM

Chief Executive Officer Jeff Bezos is running a non-profit at Amazon rather than a business, according to 24/7 Wall St.

The online retail behemoth reported its widest quarterly loss in 14 years this week, despite a 20 percent jump in revenues, as an array of new products and unfettered spending bit into results.

“The stock initially took it on the chin as it appears as though Jeff Bezos wants to continue running a quasi-nonprofit rather than a business that makes money off of its millions of customers,” 24/7 Wall St. reported.

As Amazon stumbled about 9 percent overnight after the announcement, MarketWatch flatly reported investors are “fed up” with the company’s losses.

Amazon said that its operating loss was $544 million in the third quarter, compared with operating loss of $25 million in third quarter 2013

Among the details, Amazon took a $170 million charge on its Amazon Fire smartphone, which was launched in July but has been posting lousy results – not exactly a core product for the online retailer and perhaps even a distraction.

The company also issued a ho-hum sales forecast for the current quarter, which is typically its most important because of holiday shopping, and declined to forecast whether the quarter would bring another big loss or a profit.

“Jeff Bezos has hardly done anything — well, he did nothing — to address that this is a serious disappointment,” said 24/7 Wall St. of the company’s founder and top executive.

Bezos’ only comment in the company’s dismal earnings release was as follows:

“As we get ready for this upcoming holiday season, we are focused on making the customer experience easier and more stress-free than ever. In addition to our already low prices, we will offer more than 15,000 Lightning Deals with early access to select deals for Prime members, hundreds of millions of products across dozens of categories, curated gift lists like Holiday Toy List and Electronics Holiday Gift Guide, new features like #AmazonWishList, and a great new lineup of products like Kindle Voyage and Fire HD Kids Edition. And if you order your gifts on AmazonSmile, we’ll donate a percentage of your purchase price to your favorite charity.”

Michael Pachter, a Wedbush Securities analyst, told The Wall Street Journal, “Clearly, they’ve been spending money everywhere. They’ve been releasing these new products — the phone, the set-top box, streaming originals — but it’s not clear how that leads to sales.”

24/7 Wall St.’s Jon Ogg said the consensus analyst estimate leading into the latest earnings was for Amazon to post a slight loss in 2014 — and the stock was already valued at about 160 times expected 2015 earnings.

“Jeff Bezos is operating Amazon as if it was a .org,” said Ogg, referring to the web address extension that is commonly used by charities and non-profits.

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Jeff Bezos is running a non-profit at Amazon rather than a business, according to 24/7 Wall St.
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Friday, 24 October 2014 12:46 PM
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