Amazon HQ2

How did they make that much money? Where are the money now? The money Amazon made didn’t fall through to profit :slight_smile:

I think cost of employee housing is a factor. You need to be able to hire the 50,000 people. Employees don’t want somewhere more expensive than Seattle. I’d honestly be shocked at Bay Area, Boston, or NYC due to cost of housing.

Also, they want reasonable local govnement. Does SF board of stupidvisors qualify? The Bay Area is very anti growth. That’s not going to create confidence for getting land to build offices. Then what about land for housing for employees?

Perhaps if you are going to nitpick, but here we are with Tesla too right spinning stories to stay afloat… So, interesting question: just company to company with no regards to actual spec dollars but which company would you take right now for your very own, Amazon or Tesla?

You can’t provide a direct answer to those questions? I don’t know because didn’t read the financial statements. When you claim that Amazon makes gobs of money, I presume you have read them, familiar with Amazon’s business model and can enlighten me.

Are you saying the city must be able to speedily approve construction of new office buildings and residential houses?

The answer would be Amazon…

I’m referring to these questions.

You are the one without a real job… you find the answers…:grinning:

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Amazon has huge FCF. Its net profit is tiny because it plows all its cash into new investment. Fulfillment centers and datacenters are very expensive. And Amazon is constantly developing new businesses.

Where is this money from?

AWS is hugely profitable. FBA - Fulfilled by Amazon is hugely profitable. Some more established retail categories like books are profitable. Amazon is systematically conquering retail categories one at a time. Its oldest was books. Next came DVD’s and media. The latest is fresh food. The old ones are profitable. The new ones not yet. It’s a pipeline.

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Did it play the depreciation game like us landlords?

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I would say yes based on the timeline and amount of office sq footage. I think the land would need to be vacant or something that’s already scheduled to be demolished to meet the timelines. There’s no way a city can submit a serious RFP that includes land they might be able to get after years of legal battles over eminent domain.

Even if a good percent of new hires are local, the companies they leave will have to hire back fills. It’s going to create population growth which will require new housing.

Seattle also wants the 2nd Amazon HQ. Will Amazon have both HQs in Seatttle? :expressionless:

America is hoping Amazon is serious and not playing games with Seatlle to negotiate more benefit

He doesn’t get it:

“If there are to be an additional 50,000 jobs from warehouse workers to software engineers, they should be for our residents,” Harrell said in a press conference Friday.

I don’t think Seattle has enough residents left who are qualified and want to work for Amazon. I’ve met a lot of new hires and only 2 were already living in Seattle. I doubt the residents want Amazon to relocate another 50,000 people to Seattle and further drive up housing prices and make traffic even worse.

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This old article from 2013 is still the best analysis on Amazon. People buying AMZN stocks get it. Most commentators don’t.

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I honestly thought DCF analysis was something only done in academia. I had never seen it used to make business decisions. Budget planning was always done based on revenue growth and keeping expenses growing slower than revenue to improve operating margins.

The fixed cost thing is right. If I build a building today, I want it to last for 5-7 years. If I’m growing at 25%/yr, that means the building is initially 3-5 times too large. Initially the fixed costs are too high for the volume of the building. However, at some point the building becomes profitable and prints money after that break even volume. Granted, if you keep growing at 25%, then you have to keep building new buildings. A lot of companies would build smaller buildings or wait until sales are high enough for new buildings to be break even from day 1. That’s lost opportunity and stalls momentum.

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That’s what happens when The Z beats you to the Fab 7x7!!!

Yes, it is a little more than an hour’s drive to Detroit, but Jeff, why would you want to be remotely close to this mess when you have some of the cleanest, right out of the tap water in the Bay Area??? Detroit sucks!!!