Science and Tech


Is Jeff Bezos A Visionary Or A Grinch?

Amazon's record losses have some investors upset with CEO Jeff Bezos, while others are applauding his long term vision.
Posted at 2:15 PM, Oct 25, 2014

Amazon. It's an online retailer. No, it's a smartphone maker. No, it's online streaming. No, it's a storefront.

To CEO Jeff Bezos, it's all of those things, which is a problem for some investors.

After the company reported a $437 million quarterly loss last week, its stock took a hit as well. (Video via CNBC).

NEIL CAVUTO VIA FOX BUSINESS"Amazon, not looking exactly amazing, and neither is its stock. Look at this drop. You know the company never has any problem selling stuff. They just don't make money on."

Many analysts blame the losses on Bezos's strategy of investing in a seemingly disparate range of ventures, including the Fire Phone which resulted in a $170 million write-offfor the company. 

CNN Money even went so far as to call Bezos "The Grinch that stole Amazon's Xmas" saying "Amazon now seems to be a company that is throwing every strand of spaghetti it can find at the wall to see what will stick. Amazon appears to lack focus."

But others are applauding Bezos for doing what Amazon has always done — prioritizing long term investments over short term gains.

SCARLET FU VIA BLOOMBERG: "We gang up on all these companies for not spending on investing [...] And here is Jeff Bezos doing just that. He is spending the money that they make in revenue putting it into the expansion in Asia, overseas, and the U.S., and he's getting punished for it." "Amen"

Actually, Bezos' boldness in investing is often cited as a reason for confidence in Amazon.

After the company reported another large loss last July, one analyst told CNET"If there's a huge opportunity, he's going to go all out...It might put pressure on margins, it might cause the stock to tank. But at the end of the day, that's something Amazon can own, so I think he's very aggressive about that."

And one big reason Bezos can do that is Amazon's continued growth, pegged at 20 percent. The company reported 10 million new active customer accounts since the last quarter, and its total revenue was still $20.58 billion dollars. (Video via Amazon)

Still, with operating margins around 1 percent Amazon seems to be testing the patience of its investors — which may lead Bezos to curtail some of his long term investments.

This video includes images from Getty Images.