It’s amazon’s turn
Today amazon.com is taking a beating in the stock market. The stock is down 22% similar to yahoo, however, their report seems much worse than that of yahoo!. Only the revenue year over year grew, but rest of the numbers were down and down significantly (20%-50%). Market cap for amazon.com fell as low as 11B dollars.
Is this an opportunity to buy? Yahoo has been up 10% in the last week after that horrendous drop. Will amazon do the same? I doubt it. Yahoo has a book value of 6$/share. Apart from this book value they have stake in yahoo! japan and alibaba.com (china). We can put an intrinsic value of the stock at 12-13$. So we would have been paying 13$ for yahoo’s US business. Sounds cheap doesn’t it? So, i can see some justification in a lot of value guys picking up yahoo!.
Looking at amazon, the book value is 0.777 per share!! I would imagine they’d have higher book value because they own warehouses and trucks that go around taking pictures. I am going to stay away from this stock.
