I held my one lotto put which will be worthless tomorrow. Appears they had good growth in AWS which I wasn’t anticipating that much gain there and the Rivian piece I completely missed. Back to the drawing board for the next one, I clearly have some work to do but I’ll keep trying as long as you keep me around for a bit yet.
O.O… it do be buying AMZN a lot of time though with the RIVN gain.
Late night thought while I’m trying to fall asleep, if AMZN claimed profit from their RIVN (Rivian) investment at $100 per share assuming they used end of Q4 for valuation will they have to make filing if they have sold shares? If they sold and took profit then I’m way off base and the rest of this is mindless nonsense.
But IF not can we assume they’ll have have to use same reporting metrics for Q1 and report financials based on RIVN price ending 3/31/22? If so this is where things could get interesting and we might have a good idea what AMZN Q1 ER is going to look like based on RIVN share price. I’m also unsure what the timeline looks like for them to have to report a change in ownership with the SEC if they sell any of this so anyone’s help on that would be great. I would also assume they can’t pull these numbers out of thin air and have to base the valuation on something, logical reasoning tells me it would be based on YE share price so I’ve put some data together below, pick it apart and tell me I’m nuts or onto a Q1 ER play for AMZN to put in the future playbook
Here’s what they reported for income on their FS today. A gain of $11.8B from other income which I assume is where they are putting the RIVN investment. Is there a place where we can find out what AMZN initial investment cost in RIVN since they are public and confirm this based on my numbers below?
If they have a 20% stake as stated and they are using YE share price of RIVN in their financials then they would have used the below numbers for Q4 reporting.
900M shares outstanding x 20% = 180M shares
180M x $103.69 = $18.64B position as YE 2021
This is where I might be batshit crazy and if I’m grasping at a straw then someone tell me but feel like I might be onto something here. All of this will depend on where RIVN share price is at the end of Q1 but as of today’s share price of RIVN at a closing price of $60.36 I’m not so sure Q1 ER look very bullish. All of this subject to change but a thought I wanted to get out there while it’s fresh in my mind and realize there’s some time before it plays out. I’m not sure how I feel about RIVN long term, I know there’s a lot of bulls I just haven’t spent any time on it.
180M x $60.36 = $10.86B position as of 2/3/22
The difference between the two is almost $11B loss from what AMZN stated on today’s ER and would wipe out all the other income on the FS.
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Looking at RIVN’s IPO prospectus, AMZN invested 1.835bn and held 159.5m shares post IPO. So that’s a cost basis of around 11.50 per share
You should look at AMZN’s results excl. the RIVN unrealized gain because that’s how the street will look at the results.
This is a pretty good summary of AMZN’s 4Q21 operating performance. It’s essentially now a high growth leading cloud business with a declining and unprofitable e-commerce sub-division. Am not familiar with what cloud valuations are typically like these days but that’s probably what you should comp them against
https://twitter.com/borrowed_ideas/status/1489426017513095172/photo/1
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Just also wanted to add, if RIVN price does not rebound, AMZN is looking at a big markdown which could present a bearish case. Surely, it’ll be priced into the next ER; but may present some turbulence in the short term as the market discovers true pricing with the RIVN accounting “beat” loophole.
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It’s obvious to me that my comment missed yet another huge, unintuitive finding - RIVN gains. I suspect this has to be accounted for in evaluating companies that invested(gambled?) significant amount towards their non-operations in previous quarters. Other example I can think of is TSLA buying billions of BTC, but that’s probably not the case as it counts for long term gain.
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Great breakdown by Dave Lee on the AMZN earnings: Amazon stock JUMPS - What’s going on? | AMZN, TSLA (Ep. 528) - YouTube
Thanks for posting this Kevin, great perspective!
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Amazon IS PERMANENTLY CLOSING ITS PHYSICAL AMAZON BOOKS, AMAZON 4-STAR AND AMAZON POP UP STORES - SPOKESPERSON
dunno if this is speculation or truth but throwing this out there incase and of u weirdos actually spend ur time and money on playing Amazon
any of u weirdos
Spellcheck error my fault