F-1 Comes To Jersey

I'm excited. If I'm in the area, I might have to go to this race.

Amazon Slips

Fresh off the heels of Netflix's earnings report last night, Amazon (AMZN) posted their earnings today. Needless to say, they were very disappointing:

Amazon.com Inc. is still growing at a fast pace, but Wall Street's concerns about the online retailer's margins are likely to grow after the company posted a 73% drop in quarterly profit Tuesday.

Their margins are starting to kill them:

Sales during the third quarter ended in September rose 44% compared to the same period last year, Amazon said. That's roughly in line with expectations and consistent with growth seen in recent periods. But as Amazon has roped in more sales, it has spent heavily on the expansion of shipping centers and data infrastructure, undercutting margins.

Operating margin as a percentage of world-wide sales slipped to 0.7% in the third quarter, from 3.5% in the period last year, Amazon said.

This was one of the main concerns of investors when Amazon introduced the Kindle Fire. The stock tumbled 12.39% in after hours trading. Much of this due to the gloomy fourth quarter outlook:

"They're basically calling for a break-even fourth quarter," said Ken Sena, an analyst who covers Amazon for Evercore Partners, "which is definitely disconcerting for investors."

The culprit of the margin cut looks like it's the Kindle Fire:

Szkutak danced around the culprit a bit, but the Kindle Fire, priced at $199, is definitely deterring higher earnings estimates. Szkutak also touted the long-term plan for the Kindle Fire, describing it as a “premium device,” and that Amazon takes all of the economics of the Kindle business into account, ranging from the lifetime value to the content available on the tablets and e-readers.

Because the Kindle Fire is sold at a loss, it might be the case that it won't pay off for a while. The real money will be generated in apps, Amazon Prime, and the e-books. For the time being, it's concerning because Amazon is still a strong company. In addition, it compounds the fact that in a week, we've seen Apple, Netflix, and Amazon all miss targets.

The current tech climate is alarming.

Netflix Tumbles

I like this guy, so:

Remember when Netflix raised their subscriber fees and split off their DVD mail-order services, and customers said they would boycott the company? Yeah, it seems they followed through on their words:

Shares in the once-hot but recently troubled subscription video company plummeted 27% in after-hours trading Monday after it reported a loss of 800,000 U.S. customers in the third quarter, more than the 600,000 it told investors to expect.

The stock had found some support after the price hike and the splitting of its streaming and DVD businesses:

For a while, Netflix seemed like the hot name, but it's taken an absolute beating. Reed Hastings, the CEO and graduate of my high school, is still optimistic:

“Pausing is a good thing from an investor standpoint,” Chief Executive Officer Reed Hasting said in an interview. “We are going to pause and restore our global profitability.”

Analysts don't believe it's the end of the world for the company, even though it has lost 2/3rds of its shareholder value:

"If they stop making mistakes, this is fixable," said Dan Rayburn, a principal analyst at consulting firm Frost & Sullivan. "The saving grace is that unlike a lot of other companies that get into this kind of situation, there isn't a competitor eating Netflix's lunch."

I tend to agree. They really don't have much competition and while this is a setback, they will continue to grow their business as they increase their content. They expect to have double the content and as long as it is relevant to subscriber interests, they should be fine. I'm not saying that it's time to buy NFLX. I'm not sure it has felt the entire wrath of the market yet. I do think there is potential for the company to bounce back once it gets back on solid footing.

Earthquake in Turkey

People dying and a country divided. This earthquake came at the wrong time and the people are suffering. A lot of the GOP candidates said we shouldn't give aid to foreign countries. Do you really think we shouldn't help the Turks in this time?

It was a 7.2 earthquake that hit and at least 138 people are dead.

Our thoughts are with them in these tragic circumstance.