Displaying items by tag: Amazon

Thursday, 05 April 2018 09:58

Don’t Panic Over Trump’s Amazon Push

(Washington)

The market is increasingly worried about a big regulatory push against the tech industry. Amazon, along with Facebook, are dead center in the bullseye of the push. However, Bloomberg tells investors not to be too worried. The reason why is that according to five sources inside the White House, there are no active discussions or planning about any regulation that would impact the ecommerce retailer. Even in the case of the Post Office, which Trump has focused on, rates are set by a commission, and the organization is legally barred from charging any shipper less than its cost of delivery, meaning Amazon can’t be underpaying.


FINSUM: This is quite relieving if you are an Amazon investor. However, beyond any immediate threats, we do agree that the government is going to have to reconsider anti-trust regulation in light of how data is being used an abused by large tech companies.

Published in Eq: Large Cap
Tuesday, 03 April 2018 09:51

It’s Not as Bad as it Looks for Tech

(San Francisco)

Tech has been doing very poorly lately. Between the heat on Facebook and the growing threat of regulation to Amazon and other big tech companies, things look bleak. However, they may not be as bad as they seem. The reason why is two-fold. Firstly, many experts think any tech regulation won’t be hugely disruptive to the industry. Secondly, the underlying businesses look strong and the worries about regulation have not really dented earnings expectations. All of this leads many to believe that the whole selloff is overdone and things will blow over.


FINSUM: We can’t see any major tech regulations coming out that would really dent the industry, so all else equal, we do think the selloff might be overdone.

Published in Eq: Large Cap

(Washington)

In what could either be a big worry for tech or a pile of unwarranted hot air, there are rumors circulating that President Trump may be obsessed with regulating Amazon. Last week, the president escalated his calls for regulating the company, tweeting “I have stated my concerns with Amazon long before the Election … Unlike others, they pay little or no taxes to state & local governments, use our Postal System as their Delivery Boy (causing tremendous loss to the U.S.), and are putting many thousands of retailers out of business!”. Trump has also repeatedly attacked the Washington Post, which is owned by Amazon CEO Jeff Bezos. Trump’s 2020 campaign manager said in a tweet that “Amazon has probably 10x the data on every American that Facebook does. All that data and own a political newspaper, The Washington Post. Hmm.....”.


FINSUM: Our other perspectives aside, we do think governments may need to adopt updated views of when regulation is called for. In Amazon’s case, the company is clearly not a monopoly in any sector, but the data it has does give it heightened importance. The context of monopoly laws, which are essentially modeled on 19th century ideas, don’t seem to have much scope to account for this.

Published in Eq: Large Cap
Thursday, 22 March 2018 10:44

Why Amazon is Going Into Healthcare

(Seattle)

There have been numerous articles covering it over the last few months, and it has caused some excitement and alarm in the market. The story? Amazon is going into healthcare. The hype started to build when Amazon received licenses to be a pharmaceuticals distributor. Now, Barron’s has published a piece explaining why Amazon sees an opportunity. The Internet of Things is supposed to transform the pharmaceutical and healthcare business and Amazon wants to be a part of that, especially now that it has the explicit goal of trying to lower healthcare costs in the US.


FINSUM: We think the high-minded goal of lowering healthcare costs needs to be thought of separately than Amazon’s interest in drug distribution. The fact is, the company sees a solid-margin business it can eat up with its logistics prowess.

Published in Eq: Large Cap
Wednesday, 21 March 2018 11:25

Grocers are in Trouble as Amazon Doubles Down

(New York)

While the acquisition of Whole Foods by Amazon put a great deal of fear into other grocers and investors, things have quieted down since then. Now, the fears appear to be warranted as Amazon’s plan is becoming apparent. Amazon will offer Whole Foods groceries online at the same prices as in store, with free delivery for Prime Now members. The strategy will make it very hard for other grocers, like Kroger, to compete, as Amazon will likely lose money on every transaction. Kroger, and Walmart, are both launching their own delivery programs, but both will cost between $11.95 and $9.95, making them less competitive for short shopping trips.


FINSUM: Walmart can afford to lose money to grab market share, as can Amazon, but Kroger and other small grocers may be very vulnerable.

Published in Eq: Large Cap
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