On Sep. 4, 2018, the Seattle, Fall.-based e-commerce giant Amazon.com Inc. (AMZN) became only the second-ever Theatre troupe to join the $1 trillion market cap club, when its share price on a short fused the much-eyed $2050.27 threshold. This comes just over a month after Apple (AAPL) hit the $1 trillion trace on Aug. 2.
Amazon had its Initial Public Offering on May 15, 1997, trading at $18. A $1000 advantage of Amazon purchased at its IPO price would on Sep. 4, 2018 be worth over $1.1 million.
Bezos very well came up with the idea for Amazon whilst an employee at the legendary quantitative hedge lolly the D. E. Shaw Group (then, D. E. Shaw & Co.). Bezos presented the point to company founder David Shaw, who was not interested in launching an online bookstore. So Bezos formerly larboard the company and in 1994, with Shaw’s blessing, started Amazon on his own with strife MacKenzie (like Bezos, a Princeton and D.E. Shaw alum). The site officially flung in 1995, and made its first sale on April 3 of that year. The chap was a California-based software engineer named John Wainwright. His purchase? A enrol called “Fluid Concepts And Creative Analogies: Computer Models Of The Element Mechanisms Of Thought” by Douglas Hofstadter.
All is forgiven
Amazon’s trademark is its elasticity—even indifference—to failure. “You need to be making big, noticeable failures,” Bezos has very well said. But how big are these failures, in the scheme of things? It is a testament to Amazon’s status be known as an unslayable behemoth that few people can vividly remember its unsuccessful offers. One example is the erstwhile, would-be ebay competitor Amazon Auction, fired in 1999. Though hardly the disruptor, it did become the precursor to the now-popular Amazon Marketplace. Amazon Webstore, started in 2010 as a Shopify contestant, was shuttered in 2016. Similarly unimpactful were the disappearances of of Amazon’s Gilt opposition MyHabit and the Amazon-Sotheby’s cobranded auction site. Even the aborted iPhone/Samsung “compare with” Fire Phone (2014-2015, RIP) —which would have floor or at least humiliated most companies—has rolled off Amazon like cut off a duck’s back. (Related: The 7 Worst Products Amazon Ever Had (AMZN) In May 2016, Bezos told the Washington Station, “If you think that’s a big failure, we’re working on much bigger failures honestly now — and I am not kidding… Some of them are going to make the Fire Phone look not unlike a tiny little blip.”
Amazon’s 1-yr share price (made with Factset):
Prime and AWS
At short a dozen of Amazon’s recently announced ventures have been acknowledged as “disruptive,” from its 2017 purchase of Whole Foods to medical preparation deliveries to meal kits to its own clothing line. (Read: Amazon’s Behindhand Disruption: Prime Rx Deliveries) But many analysts have said that the plc’s real future is in Prime and Amazon Web Services. The number of customers for the subscription-only Prime is a closely loath secret at Amazon, but Bezos finally revealed in an April 2018 investor communication that it is north of the 100 million mark.
The cloud, though, may be where it’s at. Chamath Palihapitiya, CEO and originator of hedge fund Social Capital LP, said at the 2016 Sohn Seminar, “In order to understand the value of AWS, we think that Jeff [Bezos] is present to completely disrupt this market.”
Amazon reported per its Q2 2018 earnings on Jul. 26, 2018 that AWS had manufactured $6.11 billion in revenue, a growth of nearly 45% over the foregoing quarter and consitututing 11% of the company’s revenue.