Amazon.com - PowerPoint PPT Presentation

Loading...

PPT – Amazon.com PowerPoint presentation | free to view - id: 1be27-ZmViM



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

Amazon.com

Description:

Today Amazon.com is a NASDAQ Fortune 500 company, currently operating six ... www.amazon.com.co: UK, Canada, France, Germany, and Japan. Revenues: 2002 ... – PowerPoint PPT presentation

Number of Views:1196
Avg rating:3.0/5.0
Slides: 22
Provided by: Gues164
Category:
Tags: amazon | com | uk

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: Amazon.com


1
Amazon.com
  • Nicola Calabrese
  • Clayzonia Hayes
  • Issam Konsul
  • Mani Khera
  • Kenia Quiñonez
  • Sean Wellman

2
  • We seek to offer Earths Biggest Selection and
    to be Earths most Customer-centric company,
    where Customers can find and discover anything
    they might want to buy online.

3
Brief History
  • Founded and incorporated in 1994 in Seattle, in
    the garage of Jeff Bezos.
  • Amazon later changed its address to Delaware in
    1997, when they decided to go public in the month
    of May at an IPO of 1.50/share.
  • Today Amazon.com is a NASDAQ Fortune 500 company,
    currently operating six websites from the UK to
    Japan.

4
Background Analysis
  • Jeffrey P. Bezos
  • Mr. Bezos has been Chairman of the Board of
    Amazon.com since founding it in 1994 and Chief
    Executive Officer since May 1996. Mr. Bezos
    served as President from founding until June 1999
    and again from October 2000 to the present.
  • Time Magazines Person of the Year, 1999

5
Board Makeup
  • Name Age
    Position
  • Jeffrey P. Bezos 39
    President, Chief Executive
    Officer and
    Chairman of the

    Board
  • Richard L. Dalzell 45
    Senior Vice President,

    Worldwide Architecture
    and

    Platform Software and
    Chief

    Information
    Officer
  • Mark S. Peek 45
    Vice President and Chief

    Accounting Officer
  • Diego Piacentini 42
    Senior Vice President, Worldwide

    Retail and Marketing
  • Thomas J. Szkutak 42
    Senior Vice President and Chief

    Financial Officer
  • Jeffrey A. Wilke 36
    Senior Vice President, Worldwide

    Operations and Customer Service
  • L. Michelle Wilson 39
    Senior Vice President, Human
    Resources, General Counsel
    and Secretary

6
Industry Comparison
7
Industry Comparison
8
Product Segmentation
  • They operate four segments
  • 1. BMVD Books, music, DVD/Video and magazine
    subscriptions
  • 2. ETK Electronics, Home Improvement, Home
    Garden products, and mail order catalog sales
  • 3. International Export sales from
    international sites, excluding US and Canada
  • 4. SVCS Commissions, fees and other services
  • In 2000 Amazon launched five International
    websites
  • www.amazon.com.co UK, Canada, France, Germany,
    and Japan

9
Revenues 2002
10
Financial Ratios - Strength
11
Financial Ratios - Weakness
12
Market Efficiency
  • Non-Company Specific News
  • July 16, 2003
  • The Federal Reserve, after pushing interest rates
    to levels not seen since Dwight Eisenhower was
    president, is letting Congress know they will
    stay there for some time and may even go lower.
  • Systematic Risk
  • Weak Form

13
Market Efficiency
  • Company Specific News
  • April 24, 2003
  • Amazon.com announces redemption of senior
    discount notes.
  • Unsystematic Risk
  • Weak Form

 
14
Stock Analysis
  • FCFE (in thousands)
  • NI -149,133
  • Depreciation 82,274
  • Capital Exp 39,163
  • ? In Working Cap 263,212
  • ? LTD 121,172
  • FCFE -248,061
  • DCF
  • G 1.4706
  • Ke 1.4543
  • Pmkt 39.27 (7/14/03)
  • P0 39.33
  • By evidence of the DCF Model the current market
    price is slightly under-priced.

15
Risk Analysis (CAPM Model)

16
Assumptions
  • The three models are unreliable since Ke is
    negative and Amazon.com has never paid a
    dividend.
  • Solution use of judgment to assess these rates.
    We estimated Ke to be between 20 to 25.
  • Computed tax rates are too low.
  • Solution use of 30 Corporate Tax Rate.
  • Stockholders Deficit (not equity!)
  • Solution take absolute values to compute
    weights and other figures.

17
WACC and MM
  • MM Model 3 a scenario with tax, financial
    distress costs, and agency costs.
  • Optimal Capital Structure
  • 71 Debt 29 Equity.
  • WACC is minimized at 8.78.
  • We would expect WACC to be higher, but the firm
    relies heavily on debt.

18
Problems
  • Stockholders deficit
  • Continuous losses
  • Negative cash flows
  • High indebtedness
  • High Beta, higher risk, high Ke
  • Corporate governance
  • Key executives are selling their shares

19
Strengths
  • High HPRs (short term gain).
  • High Revenues
  • High Sales and Gross Profit Ratios
  • Underpriced

20
Conclusion
  • Analyst Ratings
  • Strong Buy 2
  • Hold 4
  • Strong Sell 2
  • 50 Hold
  • 25 Strong Sell
  • 25 Strong Buy
  • (www.msn.com)
  • Nicola - Sell
  • Clayzonia - Hold
  • Mani - Hold
  • Issam - Hold
  • Kenia - Hold
  • Sean - Hold
  • Overall, despite five years of net losses and a
    positive HPR, we suggest that investors should
    HOLD the stock.

21
Points to remember…
Cash problems will always outweigh profitability
problems or even strengths. Bear in mind that
more businesses fail for lack of cash than for
want of profit.
About PowerShow.com