Amazon is an excellent company for a number of reasons.
It offers a great product with great service. It’s willing to experiment. And, if you have a subversive streak, you have to admire how it confounds people.
The most confounding thing about Amazon is that it doesn’t seem to want to amass much, if any profit.
Instead of collecting big profits, CEO Jeff Bezos prefers to take whatever he makes and plow it right back into the company.
In a way, it operates like a big startup. Just keep investing for growth.
As a result, Amazon operates at break-even, or at a loss occasionally. Investors are ok with this. That’s why the stock goes up after earnings that show losses.
The idea is that eventually Amazon will make money.
Amazon says that it will “check in periodically” to make sure it can still make money.
This model seems to drive people crazy. They just can’t wrap their mind around the idea that Amazon can operate at break-even or a loss and get rewarded for it.
Here, via Benedict Evans, is a look at the long term trend of profits and revenue at Amazon:
Disclosure: Jeff Bezos is an investor in Business Insider through his personal investment company Bezos Expeditions.
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