{"id":16532,"date":"2016-01-16T10:13:50","date_gmt":"2016-01-16T15:13:50","guid":{"rendered":"http:\/\/olduvai.ca\/?p=16532"},"modified":"2016-01-16T10:36:52","modified_gmt":"2016-01-16T15:36:52","slug":"amazon-and-the-fantastic-fangs-a-bubblicious-breakfast-of-unicorns-and-slippery-accounting","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=16532","title":{"rendered":"Amazon And The Fantastic FANGs\u2014\u2014A Bubblicious Breakfast Of Unicorns And Slippery Accounting"},"content":{"rendered":"
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Amazon And The Fantastic FANGs\u2014\u2014A Bubblicious Breakfast Of Unicorns And Slippery Accounting<\/a><\/h3>\n

At year end\u00a0we posted a rant about\u00a0the \u201cBrobdingnagian\u201d bubble embedded\u00a0in Amazon\u2019s market cap.\u00a0On\u00a0December 29th it was valued\u00a0at $325 billion and had gained $180 billion\u00a0or\u00a055% of that towering figure in\u00a0just\u00a0the\u00a0previous 12 months.<\/p>\n<\/header>\n

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Self-evidently this was a flashing red warning signal\u00a0that the end of the third great central bank fueled financial bubble of his century was near. AMZN and its three other FANG amigos had accounted for a $530 billion gain in market cap while the other 496 stocks in the S&P 500 had declined by an\u00a0even larger amount.<\/p>\n

That is, the apparently flat S&P 500 index\u00a0of 2015 was hiding an incipient bear\u2014\u2013owing to a market\u00a0narrowing action like none before. Compared to the\u00a0Fabulous FANGs (Facebook, Amazon, Netflix\u00a0and Google), the\u00a0early 1970s\u00a0Nifty Fifty of stock\u00a0market lore paled into insignificance.<\/p>\n

After the worst start to a year in history, some of the air has now\u00a0been let out of the bubble. Amazon\u2019s market cap is now down by $53\u00a0billion or 16% and the story has been roughly the same for the rest of the\u00a0FANGs.<\/p>\n

After\u00a0Wednesday\u2019s plunge,\u00a0Goggle is\u00a0now also\u00a0down by $52 billion or 10%; Facebook is lower by $33 billion\u00a0or 10%; and Netflix is off by $6 billion or 11%.\u00a0In all, the FANGs have\u00a0given back in eight trading days\u00a0about $144 billion or 28% of their madcap gains during 2015.
\n\"AMZN<\/a><\/p>\n

AMZN Market Cap<\/a>\u00a0data by\u00a0YCharts<\/a><\/p>\n

Call that a start, but in the great scheme of things it doesn\u2019t amount to much. Consider the case of\u00a0Amazon. Its\u00a0PE multiple on LTM net income of $328 million has dropped from\u00a0985X<\/strong><\/em>\u00a0all the way to\u2026\u2026.well,\u00a0829X!<\/strong><\/em><\/p>\n

Likewise, it\u2019s now valued at\u00a097X<\/strong><\/em>\u00a0its $2.8 billion of LTM free cash flow compared to\u00a0117X<\/strong><\/em>\u00a0at year end.<\/p>\n

…click on the above link to read the rest of the article…<\/p>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Amazon And The Fantastic FANGs\u2014\u2014A Bubblicious Breakfast Of Unicorns And Slippery Accounting At year end\u00a0we posted a rant about\u00a0the \u201cBrobdingnagian\u201d bubble embedded\u00a0in Amazon\u2019s market cap.\u00a0On\u00a0December 29th it was valued\u00a0at $325 billion and had gained $180 billion\u00a0or\u00a055% of that towering figure in\u00a0just\u00a0the\u00a0previous 12 months. Self-evidently this was a flashing red warning signal\u00a0that the end of the […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[977,122,5979,2120,1493,303,305,3920,378,11613,696],"class_list":["post-16532","post","type-post","status-publish","format-standard","hentry","category-economics","tag-amazon","tag-central-bank","tag-contracorner","tag-david-stockman","tag-facebook","tag-fed","tag-federal-reserve","tag-financial-bubble","tag-google","tag-netflix","tag-sp"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16532","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=16532"}],"version-history":[{"count":2,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16532\/revisions"}],"predecessor-version":[{"id":16534,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/16532\/revisions\/16534"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=16532"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=16532"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=16532"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}