Blue-chip stock: Amazon.com Inc.

Amazon. World’s largest e-commerce store and web services provider started by Jeff Bezos in Seattle. 

Amazon is both loved and hated by millions of individuals. To be more exact, more than half of American families are subscribed to Amazon Prime.

Today, the company is often called the most valuable brand and is considered to be one of the Big 4 US companies. The story starts in 1994, Bellevue, Washington when a 30 year-old ex-Wall Street banker Jeff Bezos saw a gap in the internet market. 

Jeff decided to start by selling books online and then expand to more and more categories. For start, he got 300,000 dollars from his adopted father and soon after, 50,000 dollars each from around 20 investors. 8 million dollars from an investment bank called Kleiner Perkins.

With such generous backing up Bezos was now able to go after the bookstore at the time called Barnes & Noble which even sued Amazon.com for its claim that it was the “Earth’s largest bookstore” at that time. 

However, both companies quickly settled. In 1997 Amazon went public and soon became a part of the dotcom boom. 1998 was the year when the website started selling music and videos, that had a largely positive new revenue. 

Getting more and more successful led the company to acquire lots of retailers mostly from the UK and Europe

In 1999 Amazon had introduced even more categories on the website such as electronics, software, toys, video-games and much more. Not long after, in 2002 with lots of investments Amazon Web Services (AWS), a cloud based web tool provider was launched which is bringing the company more than 7 billion dollars every year. 

2006 was the year when FBA (Fulfillment by Amazon) was launched, as the number of merchants on the platform was increasing very rapidly. 2012 was the year Amazon had purchased Kiva Systems for its inventory-management.

The company did not have any net profit until 2002 and then reported earnings of 5 million dollars. Back then stock was close to still being a penny stock which, like many others, suffered from the dotcom crash

Some quarters later, earnings started increasing by dozens of percentage points, stock started going up and getting more and more respected. The website was starting to thrive. By 2004 the stock had reached 50 dollars a share, which after the 1997 IPO was only trading at 1.5 dollars per share. Even after the dotcom boom, Amazon was fortunate.

Looking at the stock today, it is amazing how many people believed and still believe in the company. And the believing is worthwhile. By 2015 Amazon.com had surpassed Walmart by its market-cap and became the largest retailer in the US moneywise. 

Two years later the company had purchased Whole Foods Market as well. Today Amazon is the largest internet company by its revenue and one of the most valuable companies in the entire world. As of today, 26th of September, 2020, the market-capitalization is around 1,55 trillion dollars.

For traders who are reading this, it would be useful for you to know that Amazon stock’s daily trading volume is only around 4.6 million shares. That means, the stock is attractive to long-term investors and is quite stable. 

Although the stock is really high as of this time, it is very easy to buy fractional shares as many brokers allow this kind of buying. However liquid the stock might be, it had gained almost 158,000% since the IPO. 

Therefore, the 20 or 22 individual investors who jumped in at the beginning and put 50,000 each now are billionaires.

Today Amazon.com has more than 100 million products on its website and the company is shipping around 5 billion products per year. Many calculations claim that 40% of internet sales come from the company’s website. 

During the dot-com bubble Amazon had fallen from 113 dollars per share to 5 dollars per share. And companies like Inktomi, Infoseek and Think Tools followed. 

The tech-bubble destroyed dozens of website-based and tech companies because of them being super overvalued and not having any real intrinsic value.

As the company survived the dotcom crash and started making quite a bit of money in the early 2000s, Amazon Prime, a free 2-day shipping was introduced. 

So this 2-day shipping, how does it impact Amazon itself? With Prime, the company is losing money each time someone orders a products on their website to be delivered. One of the main money sources for it is AWS (Amazon Web Services) which is a cloud-based service for developers providing servers for large projects. 

AWS makes a ton of money for the company because it has a 34% global market share in providing web services. At the same time, Microsoft Azure has 13%, IBM Cloud has 8% and Google Cloud has only 6% of the global market share for web services. 

Another way Amazon is making money is by acquiring and running other businesses, acing more like a holding company. The most well-known acquisitions have been Zappos.com, Pets.com, Diapers.com, IMDB, Drugstore.com, Gear.com, Homegrocer.com and dozens more. 

Each of these smaller companies are making money for the website constantly and additionally to AWS (Amazon Web Services). Therefore, individual or business sellers on the platform are making money and the company is taking a commission off of every single transaction made. 

So, as we see it, nobody else out there knows a better way to capitalize than Amazon.com. Jeff Bezos, the founder and CEO, had some unpleasant experiences testifying for congress in the subject of anti-competitive business practices and stealing concepts from their sellers. 

Also, many people who sell on the platform have been very unsatisfied with the destructive terms that the company gives them and it very often seems like not the seller is controlling his or her business but Amazon itself is. 

However, it should be told that despite those few unhappy sellers, some lawsuits and anti-competitive practices Amazon.com is building the future of every aspect of our lives. If Walmart, not even mentioning Best Buy, Kohl’s and Target, was not able to stand against an e-commerce store, who will? 

If Amazon was not out there fulfilling people’s needs, industries like express or prime deliveries would not have been “delivered”. Also, such humongous improvements in customer service and support, web services, communication, immediate access to literature and much more. 

All of that would not have been possible without the actions and investments that the company is taking each year. Monopolies are actually pretty great. Not those that build or create cults or something like that but those monopolies who massively innovate themselves and child co’s. 

If a company is actually doing something that is harmful for the society and our future, it should definitely be taken apart immediately like AT&T. But Amazon does not harm neither the society nor our future

Who isn’t happy when their order arrives in 2 days or less? Or who couldn’t reach support for a prolonged period of time? We don’t know the numbers but they are, most probably, substantially low

One can find and buy almost anything on Amazon.com or its subsidiaries, just of course, except from cigarettes, cars, fully developed houses, pets, fuel, lottery tickets and liquor. From its very beginning Amazon had had a profound category structure which lives up till this day. 

Jeff Bezos, when he started the company, immediately wanted to classify the products in the best possible way. However, most classifications then came from books, because there hadn’t been too much software, video players or games around to sell.

The story of Amazon can strongly inspire pretty much anybody, either to start their own business or invest in something absolutely great. 

Jeff Bezos, being the richest man in the world is able to start practically any company that comes to minds, had founded Blue Origin and decided to get in a battle with Elon Musk. 

And that venture, well, in comparison isn’t going as well as expected. But having 3 companies competing in a newly formed space-race is definitely going to accelerate the pace by which we are moving to become multi-planetary species.

In terms of the space-race, another venture is the one of Richard Branson’s, a well-known British entrepreneur who had started with Virgin Records and later on became the builder of a global conglomerate. 

Needless to say, Branson is the founder of a space company as well, called Virgin Galactic. This venture has been going pretty well and we are sure Bezos and Musk are both at least somewhat concerned about the rapidly growing improving company. Virgin Galactic, for the sake of raising money, recently went public.

Overall, we are still here for Amazon.com, not Blue Origin, right? To conclude we need to say that innovating at the pace that the company is moving now, our society might improve drastically very soon. In terms of people’s lives, and well-being, Amazon can be the right place to go to. 

One can start selling almost anything on the platform, or become an employee of Amazon pretty easily in any field or be a partner and promote Amazon’s Audible and other people’s products for a commission as well.

Although the company had done some disappointing things in the past, we strongly believe that it all has been for the sake of a better future. 

Amazon.com and most notably its founder, Jeff Bezos had been constantly criticized by Donald Trump for tax evasion, which is not really correct knowing that Amazon is actually losing money on retail and only making it with its subsidiaries. 

The other part of revenue that Amazon generates and brings profit is massively being reinvested in the company future. That means, there is nothing to declare, employees also need their salaries.

Blue-chip stock: Amazon.com, Inc.

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