Amazon shares are up a stunning 12.5% this morning after "blowout" earnings...smashing Nasdaq to new record highs...
To new record highs...
Looks to us like this was a "catch-up" trade to the global liquidity glut...
And finally...
"probably nothing"
Just days after we reported that in the mad dash by virtually every American city to become Amazon"s second headquarters, in which some such as New Jersey offered as much as $7 billion in state and city tax credits, today Amazon announced that that it has received 238 proposals from "cities and regions in 54 states, provinces, districts and territories around North America" who want to host the company"s second headquarters, also known as HQ2.
As CNBC reports, bids for the new headquarters were due to Amazon on Thursday, Oct. 19. Cities big and small from across over America, from Newark to Boston and hundreds inbetween are trying to impress Amazon and the more than $5 billion it plans to spend on its second headquarters. One Georgia town"s mayor went so far as promising he would rename the town "Amazon" if the company agreed to build there.
Amazon didn’t name any of the bidders or say when it would come up with a short list for its potential picks. Cities including New York, Boston, Atlanta, Nashville and Austin, Texas, have said they applied for the new corporate site, which is expected to generate 50,000 high-paying jobs over nearly 20 years.
As noted previously, Amazon had very specific requirements for cities that are interested in placing a bid: it wants a city with an established mass transit system, easy access to international airports, availability of software developers and other tech talent, cultural fit and the ability to move into a
phase-one site as early as 2019. Other items on its wish list: a metro
area of more than one million people and tax incentives.
Still, as the WSJ adds, it is unclear where Amazon might land. “I don’t think any one market fits everything. It’s going to be a balancing act of the various attributes,” says Dave Bragg, a managing director at Green Street Advisors, which conducts real-estate research.
Amazon has increased its workforce from a few thousand to more than 40,000 over the past decade. And it is still planning to add 2 million square feet and 6,000 people in the next 12 months.
But to keep growing, the company needs more space. Amazon has said that it will give its team leaders a choice between staying in Seattle, relocating or being based out of both. It has said that the average pay for the new jobs will be around $100,000, depending on where it locates.
Recently Bloomberg laid out some of the cities that have a good shot at hosting HQ2:
Atlanta: The southern U.S. city, home of Amazon delivery partner United Parcel Service Inc., is a major flight hub, and the greater metro area houses a dynamic population of almost 6 million, as well as the headquarters of major corporations like Coca-Cola Co. and Home Depot Inc. Still, Atlanta is a relatively suburban city, compared with the urban HQ1 of Seattle.
Boston: Several Amazon executives have already advocated putting HQ2 in Boston, due to its proximity to Harvard University and Massachusetts Institute of Technology; an airport with nonstop flights to Seattle and Washington D.C.; and a lower cost of living than some other large urban areas. Amazon has ties with Boston already, having purchased local robot maker Kiva Systems Inc. for $775 million in 2012. The city also won General Electric Co.’s 2015 new headquarters bid, and has provided more than $100 million in grants, property tax relief and programs for GE – though the city has said it won’t negotiate any incentives with Amazon until Boston makes it past the first round of the selection process.
Chicago: The Windy City ranks second in Anderson Economic Group’s analysis of 35 cities competing for the precious HQ2, focusing on its talent, diverse ecosystem and access to transportation in its bid. Just last month, Illinois Governor Bruce Rauner reauthorized the Economic Development for a Growing Economy (EDGE) tax-credit program, which provides special tax incentives to companies relocating to Illinois or expanding operations in the state when another state is actively competing, according to BNA. One issue? The city isn’t known as a center of technology.
Denver: Denver has a busy international airport and is surrounded by a highly educated workforce. It’s also home to a surge of millennials looking for high-tech and energy jobs in Colorado, and boasts an outdoorsy lifestyle that’s an easy fit for Amazon’s quality-of-life considerations. Colorado has also chosen eight sites that meet Amazon’s requirements for HQ2. Still, other cities are offering larger tax breaks than Denver.
Detroit: Detroit offers low rent and the potential for larger tax breaks, because the city and the state of Michigan are still trying to turn themselves around and diversify from manufacturing. Michigan is also home to three big universities that produce a broad pool of talent. According to Michigan State University, 70 percent of its engineering graduates remained in the state. Even so, Governor Rick Snyder has said he will not ask the state legislature to approve additional incentives just for Amazon, according to Crain"s Detroit Business. The city’s mass transit system also isn’t on par with some other cities in the running, and Detroit has a smaller tech scene.
New York: In its bid for HQ2, the Big Apple is pitching its diverse workforce, robust university ecosystem and access to advertising, fashion and other industries. Brooklyn is emerging as an attractive component of the bid, with its building boom and throngs of young residents. New York is so serious about HQ2 that Mayor Bill de Blasio had landmarks around the city, including the Empire State Building and One World Trade, lit up in "Amazon orange" on Wednesday night. (Neighboring Newark, New Jersey, is also jumping in to bid, offering practically the same workforce with $7 billion in potential tax credits.) The bid by the biggest U.S. city may be at a disadvantage because of limited space for construction and already-high housing costs.
Amazon is expected to reveal the home of its new headquarters some time in 2018.
Separately, in its quest to consume all possible information about its clients, next month Amazon customers in select US states will be able to order take-out from certain local restaurants directly through the Amazon app. Users will be able to browse participating restaurants, place their order and checkout with stored payment information all through the app, without any additional accounts or logins needed.
The expansion of Amazon Pay integrates Clover point-of-sale systems, sending orders directly to restaurants in select states in the Northeast U.S. "Clover has the technology and scale we needed to bring this vision to life," Amazon said in a statement. "We"ve had an ongoing partnership with Clover — we used them to great success with our Kindle pop-up stores — and it was only natural to expand on that."
According to CNBC, the restaurant take-out service is already available for orders from T.G.I. Fridays as of July and will expand to include restaurants in New York, Massachusetts, Connecticut, New Jersey, Pennsylvania, Maryland and Washington D.C. — and, of course, the Seattle area.
Authored by Scott Galloway op-ed via The Wall Street Journal,
Four tech giants - Amazon, Apple, Facebook and Google - have added $2 trillion to their combined market capitalization since the 2007-09 recession, a sum that approaches the GDP of India. The concentrated wealth and power of these companies has alarmed many observers, who see their growth as a threat not just to consumers and other businesses but to American society itself.
After spending most of the past decade researching these companies, I’ve come to the conclusion that our fears are misplaced in focusing on what I call the Four. We should instead be worrying about the One: one firm that will come to dominate search, hardware and cloud computing, that will control a vast network of far-flung businesses, that can ravage entire sectors of the economy simply by announcing its interest in them.
That firm is Amazon. Jeff Bezos has been disciplined and single-minded in his vision of investing in the most enduring consumer wants—price, convenience and selection. Coupled with deft execution, it has made Amazon the most impressive and feared firm in business.
As for the other three, don’t be misled by their current successes. They are falling behind as the One marches ahead.
Google seems to have a commanding market position when it comes to search functions. As European Union regulators pointed out in their recent antitrust finding, Google has an astonishing 90% share in the category in Europe. Its share in the U.S. is 64%. But it’s a very different story in the narrower, and more lucrative, domain of product search. In 2015, more product searches in the U.S. began on Amazon than on search engines, including Google (44% vs. 34%), according to BloomReach. A year later, Amazon’s share grew to 55%. Amazon could reasonably be described as a search engine with a warehouse attached to it.
For years, Apple has been the undisputed king of hardware innovation. But the prize for the most disruptive recent device goes to the hands-free, voice-controlled Amazon Echo speaker and its buttery voice, Alexa. Research firm Gartner predicts that 30% of computing will be screenless by 2020. So far, Apple looks to have blown an early lead in the great voice race: With 700 million iPhones in use world-wide, Apple’s Siri still has the most share in voice overall. But Amazon’s share of voice on home devices—the next frontier—is 70%.
Today’s fastest-growing sector in tech is cloud computing. There are several big players in the field, including old and new tech: IBM , Microsoft , Google. The dominant player again is Amazon, with a business launched originally to support its internal computing needs. According to Synergy Research Group, Amazon’s cloud offering (called Amazon Web Services) enjoys more than 30% of the market, triple the share of the No. 2, Microsoft’s Azure, and will register $16 billion in revenue in 2017. Financial pundits, looking for something negative to say about Amazon’s recent quarterly earnings, highlighted that growth in the company’s cloud business had slowed to 43%. “Slowed to 43%” is not a phrase you read in any other equity analyst’s write-up of a large company in 2017.
Amazon’s consistent outperformance of the other three tech giants is distinct from its continued dominance of old-economy firms. With the acquisition of Whole Foods, Amazon will likely become the fastest-growing online and bricks-and-mortar retailer. The whole grocery sector—with $612 billion in U.S. sales in 2016—has been disrupted overnight by Amazon. In the months between the announcement and closing of Amazon’s acquisition of Whole Foods this year, the largest pure-play grocer, Kroger , lost nearly a third of its market value.
The late business professor C.K. Prahalad of the University of Michigan famously argued that the most successful firms focus not on one market but on one “core competence.” Amazon has proved otherwise. What Amazon has accomplished across industries is unprecedented, even among the most successful businesses. Nike does not have a cloud business; Starbucks is not developing original TV content; Wal-Mart has not filed patents for warehouses in the sky. Amazon has recently been granted patents for a floating warehouse and small drones that can self-assemble into bigger drones capable of transporting larger packages, reflecting the ability, one day, to operate intricate networks of fulfillment by air. Other firms are punished for straying from their familiar areas of strength; Amazon sucks value from sectors in which it has had no previous involvement just by glancing at them.
At New York University’s business school, where I teach, I have for years kept a close watch on which firms are winning the competition for the most talented students. A decade ago, the top recruiter was American Express , with investment banks vying for second position. Now the clear winner is Amazon: 12 students from my most recent class have opted for a life of rain and overrated coffee in the Pacific Northwest.
Why does Amazon’s ascent matter? Aren’t lower prices and greater efficiencies better for everyone? They are, in all the obvious ways, but that’s not a complete picture. Amazon’s seemingly boundless growth forces us to wrestle with difficult questions about the reasons for its dominance.
For one, Amazon, unlike any other firm its size, has changed the basic compact with financial markets.
It has replaced the expectation for profits with a focus on vision and growth, managing its business to break even while investors bid up its stock price.
This radical approach has provided the company with a staggering advantage in free-flowing capital. Google, Facebook, Wal-Mart and most Fortune 500 companies are saddled with expectations of profits. Many firms would be much more innovative if they were given a license to operate without the nuisance of profitability. Amazon has thus had enormous capital on hand to invest in delivery networks, especially the crucial last link for getting goods to the doorsteps of consumers, without having to worry that they don’t yield immediate profits.
Amazon’s strategy of break-even operations also means that it has virtually no profits to tax. Since 2008, Wal-Mart has paid $64 billion in federal income taxes, while Amazon has paid just $1.4 billion. Yet, while paying low taxes, Amazon has added $220 billion in value to the stock held by its shareholders over the past 24 months—equivalent to the entire market capitalization of Wal-Mart.
Something is deeply amiss when a company can ascend to almost a half trillion dollars in market value—becoming the fifth most valuable firm in the world—without paying any meaningful income tax. Does Amazon really owe so little to support public revenue and public needs? If a giant firm pays less than the average 24% in income taxes that the companies of the S&P 500 pay, it logically means that less-successful firms pay more. In this way, Amazon further adds to the winner-take-all tendencies plaguing our economy.
Because Amazon is more efficient than other retailers, it is able to transact the same amount of business with half the employees. If Amazon continues to grow its business by $20 billion a year, the annual toll of lost jobs for merchants, buyers and cashiers will be in the tens of thousands by my calculations. Disruption in the U.S. labor force is nothing new—we have just never dealt with a company that is so ruthless and single-minded about it.
I recently spoke at a conference the day after Jeff Bezos. During his talk, he made the case for a universal guaranteed income for all Americans. It is tempting to admire his progressive values and concern for the public welfare, but there is a dark implication here too. It appears that the most insightful mind in the business world has given up on the notion that our economy, or his firm, can support that pillar of American identity: a well-paying job.
Amazon has brought us many benefits, but we all must recognize that the rise of the One brings with it much more than free two-day delivery. “Alexa, is this a good thing?”
In the wake of their embarrassing electoral defeat in November, Congressional Democrats are turning against the wealthy tech benefactors who bankroll their campaigns. To wit, a group of 12 Democratic Congressman have signed a letter urging the Department of Justice and the Federal Trade Commission to conduct a more in-depth review of e-commerce giant Amazon.com Inc."s plan to buy grocer Whole Foods Market Inc., according to Reuters.
Rumblings that Amazon is engaging in monopolistic business practices resurfaced last week when the top Democrat on the House antitrust subcommittee, David Civilline, voiced concerns about Amazon"s $13.7 billion plan to buy Whole Foods Market and urged the House Judiciary Committee to hold a hearing to examine the deal"s potential impact on consumers.
Making matters worse for the retailer, Reuters reported earlier this week that the FTC is investigating the company for allegedly misleading customers about its pricing discounts, citing a source close to the probe.
The letter is at least third troubling sign that lawmakers are turning against Amazon, even as President Donald Trump has promised to roll back regulations, presumably making it easier for megamergers like the AMZN-WFM tieup to proceed.
So far, it’s mostly Democrats who are urging the FTC to take “a closer look” at the deal. However, some suspect that Amazon founder Jeff Bezo’s ownership of the Washington Post – a media outlet that has published dozens of embarrassing stories insinuating that Trump and his compatriots colluded with Russia to help defeat Democrat Hillary Clinton – could hurt the company’s chances of successfully completing the merger, as its owner has earned the enmity of president Trump. Similar concerns have dogged CNN-owner Time Warner’s pending merger with telecoms giant AT&T.
In the letter, the group of Democratic lawmakers – which includes rumored presidential hopeful Cory Booker, the junior senator from New Jersey – worried that the merger could negatively impact low-income communities. By putting other grocers out of business, the Amazon-backed WFM could worsen the problem of “food deserts,” areas where residents may have limited access to fresh groceries.
"While we do not oppose the merger at this time, we are concerned about what this merger could mean for African-American communities across the country already suffering from a lack of affordable healthy food choices from grocers," the letter said on Thursday.
In the hopes of changing Whole Foods’ “whole paycheck” image, Amazon has lobbied Congress to be able to accept food stamps online, and is participating in a pilot program to “expand access” to fresh food in impoverished communities. You can read the letter in full below:
@MaxineWaters @CoryBooker among 12 MoCs w/ concerns re: @amazon-Whole Foods deal. Read their letter to DOJ/ FTC -> https://t.co/fYh6kK0Wq9 pic.twitter.com/XZEgH3lv7I
— Jessica A. Torres (@jessalttorres) July 21, 2017
Brian Huseman, Amazon"s vice president of policy, in a letter to Fudge, tried to placate the angry Democrats by assuring them that Amazon intends to address their concerns.
""We agree with you that access to food is an important issue for the country, and we share your goal of improving that access," Huseman said in the letter.
"We deliver low-cost, healthy food to zip codes across the country that before Amazon had limited access to a large selection of high quality foods," Huseman wrote to Fudge.
Huseman also disputed claims that Amazon is anti-competitive, pointing out that Wal-Mart has a larger market share, and added that the company doesn’t plan on laying off workers…despite widely touting its plans to rely on automation – including special sensors and artificial intelligence – to eliminate the need for cashiers in it brick-and-mortar grocers.
“Amazon has sought to dispute that it would monopolize the grocery industry. Wal-Mart Stores Inc currently controls the largest market share.
‘We also do not plan job reductions as part of the acquisition, which if approved would result in a company with a combined less than 3 percent of national grocery sales,’ Huseman wrote.”
The letter was released to the public by the United Food and Commercial Workers union, which praised the Democrats plans to fight back against a merger that will likely result (despite Huseman’s claims to the contrary) in a sharp reduction in its membership base.
“Political concerns about Amazon’s acquisition of Whole Foods are growing for good reason,” UFCW President Marc Perrone said on Friday. “Amazon’s monopolistic desire to control the retail market and replace good jobs with automation is not only a direct threat to the hard-working men and women at Whole Foods, it’s also a direct threat to our economy and consumers."
Amazon and Whole Foods hope to expand access to fresh food, said Brian Huseman, Amazon"s vice president of policy, in a letter to Fudge, also on Thursday.
"We agree with you that access to food is an important issue for the country, and we share your goal of improving that access," Huseman said in the letter.
So far, any negative impact on Amazon’s shares has been minimal as the broader market remains in rally mode. On Friday, the Nasdaq fell after rising for nine straight days – stopping just shy of what would’ve been its longest winning streak in years.
On Tuesday, in its attempt to corner the last elusive space of the retail market - clothing - Amazon announced the launch of Prime Wardrobe, "A New Fashion Platform" which will be included in current and future Prime memberships, Amazon said on its website. Essentially Prime Wardrobe will allow users to try clothes on before they buy and receive discounts.
This is how Amazon"s latest service, currently in beta, will work according to TC:
While we can see extensive ways how this "goodwill" arrangement between Amazon and its millions of clients can be abused, the logic behind the new launch is simple: by taking the hassle and regret out of returns for clothing, the same way Zappos did before it bought it, Amazon hopes to make people more comfortable pulling the trigger on an online apparel purchase, especially when including the bonus discount. Meanwhile, a poor choice only costs you a trip to UPS. The move could be quite lucrative for Amazon, as apparel’s share of all digital spend has grown for the past three years straight from 15.4% in 2013 to 17% in 2016, according to comScore.
Unlike similar services, such as Stitch Fix and other fashion delivery services where you are shipped a box of clothing you don’t choose which is targeted at people who don’t like shopping (especially men) Prime Wardrobe allows customers to pick and choose what they want rather than delivering a random grab bag. Tech Crunch muses that if Wardrobe tests well, Amazon would consider acquiring Stitch Fix, TrunkClub, or another boxed fashion delivery service to instantly boost its scale.
Prime Wardrobe will also aligns with the Amazon Echo Look that takes full-length photos of you to review your day’s clothing choices and uses the Amazon StyleCheck app feature to have AI score your fashion decisions. In other words, Jeff Bezos will first help you pick your clothes for you, and then sell them.
Eventually, Prime Wardrobe will also integrate with the Amazon Fashion vertical that features upscale clothing.
As Jeff Bezos said a decade ago, “In order to be a $200 billion company we’ve got to learn how to sell clothes and food.” Of course, while central banks have helped Amazon surpass this particular bogey long ago, nailing the clothing ecommerce experience which has been rather elusive for the online retail giant will further expand Amazon’s monopoly on the complete retail experience. Which is all great news for AMZN shareholders, it is terrible news for existing clothing retailers who will suffer even greater sales and margin erosion, leading to more store shutdowns, and even more bankruptcies.
As a reminder, according to Moody"s here is a list of the most distressed US retailers...
... and the carnage, as discussed recently, has already resulted in a record number of annualized store closures. This number is set to explode if Amazon"s new offering gains traction.
If you were one of the myriad analysts, next-in-rotation fund managers, tech commentators, et al paraded across the financial/business media over this past week – you had a good week. The narrative of “earnings beats” together with the so-called “relief rally” emanating via the French elections helped propel the argument.
However, if one (once again) peered passed the headlines of Non-GAAP reporting alchemy that would make Issac Newton envious one could clearly see that all was not “gold.”
Both Amazon™, and Alphabet™ (aka Google™) beat handily, and yet, a few questions emerged via my reasoning. First:
Has Google Ad revenue benefited from an increasing advertising pie? Or, are we seeing the first hints of rotation from platform to platform as advertisers dump one for another in a desperate attempt to obtain some form of return for their social or digital ad dollars?
It’s possible it could be the latter, and if so it spells “it’s different this time” just like it has before. i.e., circa early 2000.
The reasoning for this is simple: Twitter™.
As I have stated on more occasions than I can count, the one company to watch for clues into what is the entire “tech” or “Silicon Valley” health of the “ads for eyeballs” model is Twitter. And this once songbird of everything that was/is “The Valley” did something that is the anathema of what is presumed to be the “holy of holies” metric for the entire genre. To wit:
But not too worry, for this is reported as an earnings “Beat” when using Non-GAAP metrics. Yes, declining (again – declining!) ad revenue is reported as “Good News!” The only person I can see with more wonderment across his face than the ghost of Sir Issac is that of Bernie Madoff as he watches all this from a cell wondering “And I’m in here for what precisely?”
Then, of course, there’s Amazon.
After disappointing reports over the past two quarters Amazon (once again) rocketed to new heights as the headlines of “Beat”, “Smashed” and every other exclamation known-to-man was used to report it raced across the media. And yet, if you looked closely, again, there are a few issues contained within that should make those who are closing their eyes and hitting the “Buy” button horns-over-hooves concern.
Moreover, as I posed the idea of “What if?” into the “ads for eyeballs” assumptions earlier; what does one takeaway when viewing the current rocket ship ride of Amazon? For if personal spending is supposedly DOA as was reported via the latest GDP report (e.g., worst since 2009) and GDP is now reported to be an abysmal 0.7% (not a typo) what’s fueling this?
Hint: It’s an outlier, or said differently: It’s nothing but what’s known as a “Momo Play.” To view it as anything representative, or as a “gauge” of current economic health (As I heard many a talking-head try) is as I’ve stated before – an abject lesson for wanting to be blissfully, ignorant. (Always remembering this is my opinion, for who knows where this “rocket ship” can travel.)
So with the above for context the issue at hand is: “Now what?”
The real trouble, in my estimation, lies with precisely where we might be in regards to “the markets.” By all rational objective reasoning, backed with the lessons which should be held front-and-center from not just the dot-com crash, but also the financial crisis of ’08. One can’t shake the feeling that we’re precisely (once again) on that knife’s edge. And just the mere fact of the “markets” precariously balancing on that “edge” is beginning to draw blood. The tell-tale signs are everywhere. Below are only a few of the ever-growing list…
These are just a few of the very real questions that are now permeating the once “it’s different this time” argument for belief. The problem with it is – that’s what always gets said right before reality comes roaring back with a vengeance.
I can’t make this point enough: Only since the election of Donal Trump the “markets” have been on a rocket ride straight up. Before that moment (i.e., October) the Fed. Chair herself was musing the idea that the only way to heal the lasting effects still within the economy was to possibly run a “high pressure” policy stance. (i.e., uber-dovish)
That “ride” has (once again) allowed for the proclamation of the NASDAQ™ hitting never before seen in human history highs. (e.g., 6000+) All against a backdrop of declining GDP, along with declining revenue and more from many of its once star players. All while not accounting for (in my opinion) the effects of those 2 rate hikes. These have yet to be both factored, as well as felt, in the current “market.”
As of right now the “hopium” trade that is a direct result of the Trump “reflation” trade is still self-propelling – but it’s quickly running out of fuel as evidenced by not only none of the campaign promises being passed (i.e., Obamacare repeal and others) but a 1 week resolution was needed as to not shut the government down.
And the “markets” closed where?
Hint: Right back to where they were before when I stated “You are here.” And things have not gotten better, as a matter of fact, they are worse – far worse. (e.g., Unless you are one of those who like to buy-the-potential-nuclear-war-dip that is. And if so, take solace in your decisions, because the President keeps suggesting the idea is closer by the day.)
What the Fed. has unleashed into the “markets” via their ever evolving iterations of QE and its ever grateful HFT frontrunning brethren (see the now resigned Richmond Fed. president Lacker for clues) has been the only fuel as to power the markets where they now stand. What they’ve also done in unison is make everyone oblivious to the inherent dangers within.
Hedging and more has been a fool’s errand, and for many, an abject lesson in not only losing money, but status. (See the Hedge Fund industry for clues.) However, what might be even more indicative of that intervention is none other than the tech space, with all its unicorns, deca-corns, and even super-corns (yes, that’s now an actual term in “The Valley”) suddenly coming up lame in the unicorn stables of “Cha-ching!” Not to mention the IPO disasters and disappearance of those “Crushing it!” stock valuations. (See Snapchat™ for clues.)
This is where the beginning signs for caution are raised for anyone paying attention. And they are there – in spades. But there are also other areas to watch that help back up the hypothesis. And one of the first to show stress when things are not going as well as planned in “tech” land is: The Russell 2000™ e.g., the small business index.
The Russell is not only not showing the exuberance of the others, it’s beginning to show all the signs of rolling over. That is something to take notice in conjunction with the tech sector as it hits ever higher highs. How that dichotomy resolves is anyone’s guess at this moment. But trying to ascertain any clues is of a paramount importance in my opinion.
Another key earnings report that may give far more light than anyone estimates is coming up on Wednesday. That, of course, is Facebook™.
As of today all the estimates are that they’ll handily beat and some analysts are raising their targets. It’s very well they could, especially in today’s world of earnings reporting alchemy. However, one thing which caught my attention was the sudden touting a few weeks back that they had hit “5 Million advertisers.” Small businesses noted as the “key driver.”
“Sound great!” many are saying, and, in-truth, it is a worthy milestone. However, I see the timing as possibly a little suspect, here’s why… (I make this point for it has become near laughable how nearly all upcoming “tech” earnings reports now suddenly coincide with an ever-growing list of preceding announcements of grandiose ideas that are alluded to be right around the corner (like next week!) of flying cars, self driving trucks, rocket rides to space, virtual reality, just to name a few.)
Facebook as of late has been in the news with nothing but negative reports with a slew of horrendous acts being broadcast via their platform. e.g., Rape, kidnapping, beatings, and others. One of the concerns over all this (apart from the issue itself) was a possible backlash from potential advertisers. And who could blame them, and there lies the possible rub…
As I implied with the sudden “5 million” hoopla, what I’m asking is this: Is the addition of these stated 1 million plus new small business advertisers a replacing (therefore a diversion as to squash attention) for the potential of 1 or 2 (or more) large buyers who may have pulled ads?
In other words, if they’ve added so many “new” small business users – shouldn’t the ad revenue explode this report with all things being equal? I believe this is the metric to watch for.
How the numbers break down should be interesting. Google showed its own problem (via Youtube™) seemed to have been a one-off with no real impact. That said, I don’t think that comparison is the same for Facebook should the numbers show otherwise.
We shall see.
If there is a “hiccup” in Facebook’s reporting, coinciding with a realization that the reflation trade is all but DOA along with much of the legislation that was supposed to make it so. I believe we could be in for a very, very, interesting week ahead.
Then again, if a nuclear showdown does persist even more so than today?
I guess the “Buy The Nuclear Annihilation Dip” nonsense is back on.
