The ‘Jeff Bezos Reality Distortion Field’February 3, 2013 4:55 am
Convincing Wall Street that you are a growth story is one thing; keeping them convinced that you are still a growth story for more than a decade, without showing much of profits – that is something else. People talk about the ‘Steve Jobs Reality Distortion Field’ but he just made you shell out money for a real product, after all. Jeff Bezos, on the other hand, has such a strong reality distortion field, that he makes you shell out money for AMZN, which is essentially a promise on future cash flows.
Two points to look at:
1. AMZN shareholders are paying $265.00 for $.075 of trailing earnings. (Source)
2. “Amazon has been around for well over a decade, and they have never been able to get their EPS over $3.00 for a full year, even with revenue per share as high as $124.00. Meaning they have never been able to even get EBITDA to crack that $2.5 billion threshold – or 2% of their company’s current shareholder-determined value.” (Source)
The Jeff Bezos Reality Distortion Field id the real deal. He has managed to sell AMZN as a perennial growth story – with growth on the topline and a near-non-existent bottomline.