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Paul Craig Roberts Questions "What Really Explains Amazon.com's Share Price?"
07-28-2017, 08:34 PM,
#1
Paul Craig Roberts Questions "What Really Explains Amazon.com's Share Price?"
Paul Craig Roberts Questions "What Really Explains Amazon.com's Share Price?"

<p><a href="http://www.paulcraigroberts.org/2017/07/28/pcr-takes-look-todays-top-stories/"><em>Authored by Paul Craig Roberts,</em></a></p>
<p>PCR Takes a Look at Today&rsquo;s &ldquo;Top Stories&rdquo; on <a href="https://www.bloomberg.com/news/articles/2017-07-27/bezos-surpasses-gates-as-world-s-richest-ahead-of-amazon-results?cmpid=BBD072717_BIZ&amp;utm_medium=email&amp;utm_source=newsletter&amp;utm_term=170727&amp;utm_campaign=bloombergdaily">Bloomberg</a></p>
<blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p>&ldquo;Jeff Bezos briefly overtook Bill Gates as the world&rsquo;s richest person. A surge in Amazon shares Thursday morning in advance of its earnings report gave Bezos a net worth of $92.3 billion, surpassing the Microsoft founder&rsquo;s&nbsp;$90.8 billion fortune.</p>
<p>&nbsp;</p>
<p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/07/26/20170727_bezos.jpg"><img height="285" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/07/26/20170727_bezos_0.jpg" width="600" /></a></p>
<p>&nbsp;</p>
<p>In afternoon trading, Bezos remains ranked second on the Bloomberg Billionaires Index. Gates has held the top spot since May 2013.&rdquo;</p>
</blockquote>
<p>Amazon&rsquo;s stock closed yesterday at $1,046 per share. Amazon&rsquo;s profits do not support this extraordinary price. Apple, a very profitable company, has a share price of $150.56, an overprice itself.</p>
<p><u><em><strong>What or who is making Bezos so rich from an online sales company?</strong></em></u> Note, amazon.com is just sales. It is not some new manufacturing technology that produces valuable output at low cost. amazon.com is what Walmart, Sears, and Macy&rsquo;s do, the difference being that amazon.com is online and Walmart, Sears, and Macy&rsquo;s are in physical locations where real merchandise can be experienced hands on and tried on for fit.</p>
<p>In other words, online purchases are convenient, but you don&rsquo;t know what you are getting. Does it fit? What is the quality? And so forth. How many times do you send it back before you get what you want?</p>
<p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/07/27/20170728_cia.jpg"><img alt="" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/07/27/20170728_cia_0.jpg" style="width: 600px; height: 312px;" /></a></p>
<p><u><strong>There are two answers to the question about who is making Bezos rich.</strong></u></p>
<blockquote><div class="quote_start"><div></div></div><div class="quote_end"><div></div></div><p><strong>One is that Wall Street is betting that the collapse of US anti-trust law and regulatory authority - it is still on the books but not enforced, just look at the Big Banks - and the ability of Bezos to use his ownership of the Washington Post, the newspaper of the country&rsquo;s capital, to support those who support him, ensure that amazon.com will be an online monopoly.</strong> Once this is put in place, amazon&rsquo;s prices and profits will rise, and the extraordinary amazon.com P/E ratio will come into line with reality.</p>
<p>&nbsp;</p>
<p><strong>Another is that Bezos&rsquo; cooperation with Washington&rsquo;s spy network over all Americans is paid for by the CIA&rsquo;s many front companies</strong> driving up the price of amazon.com&rsquo;s stock. As the price of amazon.com rises, so does Bezos&rsquo; wealth.</p>
<p>&nbsp;</p>
<p>[ZH: perhaps there is another reason related to the latter...]</p>
<p>&nbsp;</p>
<p><a href="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/07/26/20170727_bezos2.jpg"><img height="325" src="http://www.zerohedge.com/sites/default/files/images/user3303/imageroot/2017/07/26/20170727_bezos2_0.jpg" width="600" /></a></p>
</blockquote>
<p><u><strong>I don&rsquo;t know that either of these answers is correct. </strong></u>What I notice is that Bill Gates who heads the largest digital technology company is on occasion second fiddle to Bezos who heads an online Sears or Macy&rsquo;s.</p>
<p><em>Apple with a share price of $150 earned $52.9 billion during the second quarter of 2017. Earnings per share were $2.10.</em></p>
<p><em>Amazon.com earned $38 billion. Earnings per share were 40 cents.</em></p>
<p><em>Why is amazon.com&rsquo;s price $1,046 per share and Apple&rsquo;s price is $150.56 per share.</em></p>
<p><em>Apple&rsquo;s earnings per share are 5.25 times higher than amazon&rsquo;s, but amazon&rsquo;s stock price is 6.9 times higher than Apple&rsquo;s. What explains this?</em></p>
<p><strong>The free market answer is that amazon.com, a company that sells other companies&rsquo; products, is more promising than a high tech leading manufacturing company of our time.</strong></p>
<p><em><u><strong>Does that make sense to you?</strong></u></em></p>
<p>Keep in mind that it was Bezos&rsquo; government propaganda sheet, the Washington Post, that gave credibility to the shadowy organization, PropOrNot, an entity better hidden than an offshore money laundering operation, that produced a list of 200 truth-tellers which it libeled as &ldquo;Russian dupe/agent.&rdquo;</p>
<p>Monopolies are inconsistent with free market capitalism and with democracy. Monopolies and government bond together to create fascism.</p>


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