Matthew Waterman
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Matthew Waterman in Brand Power,

Amazon's Stock Price Is About To Drop A Whole Lot

Not because of anything that's come up in the news recently, but because of valuation. Trees do not grow to the sky, and Amazon (AMZN), no matter how cool their delivery technology is, also cannot grow without barriers. Amazon's #1 barrier? It's SGA costs. Selling, General, and Admin took up more than 100% of the company's gross profit last year, and almost all of it in the two years previous. 

High SGA costs are the sign of a company failing to get an edge in competing against their peers. It could be true that internet sales are placing a drag on Wamart (WMT) as well, but their larger competitor is turning a profit consistently, and that is what will really matter in the end. The current P/E ratio on Amazon is over 800. If you think that's only going to keep getting better, you're wrong, and I have told you that in the past as well. The last time was right before Amazon lost 25% of their market cap

Keep dreaming. 

Amazon closed down $3.04 to $625.31 today, Walmart closed up 50 cents at $58.11.