This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

The Five Dumbest Things on Wall Street This Week

1. The Proof Is in the Pudding

Amazon.com (AMZN - Get Report) is getting its just desserts.

Shares of the Seattle-based online commerce giant hit a three-year low Wednesday after second-quarter earnings plunged 58% from a year ago .

Big selloffs are nothing new for Amazon, which at the height of the Internet bubble once fetched a split-adjusted $113 a share. But the latest swoon shows Wall Street isn't buying CEO Jeff Bezos' growth strategy.

One sore point is the Amazon Prime promotion that gives users a year of free shipping after they pay a one-time fee of $79. Analysts believe Amazon Prime is crushing profit margins by boosting shipping costs.

But Bezos stoutly defends Amazon Prime. "We see an increase in sales from those Amazon Prime members," he said on Tuesday's post-close conference call , "and it deepens our relationship with those customers."

Deeper still is Bezos' rationale for Amazon's recent push into the low-margin grocery business. With the stock down 44% this year, Amazon holders aren't eager to take on Wal-Mart (WMT) on its home turf.

But Bezos touts Amazon's vast grocery selection and notes "extremely positive" consumer reaction, according to a transcript on seekingalpha.com .

"We don't just carry a few flavors of Jell-o," Bezos continues, hammering his point home. "We carry all 80."

Sweet dreams, Jeff.

Dumb-o-Meter score: 93. More clear reasoning: Amazon aims to find "elements that matter to customers that are durable in time, where we can build flywheels that we can continue to put energy into," Bezos explains on the call.

To view Colin Barr's interview about the Five Dumbest this week, please click here .
1 of 5

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
DELL $0.00 0.00%
AMZN $433.89 -0.87%
HPQ $30.44 -0.81%
RSH $0.31 12.76%
AAPL $125.48 -0.76%

Markets

DOW 17,615.40 -114.71 -0.65%
S&P 500 2,060.61 -16.17 -0.78%
NASDAQ 4,967.6480 -41.5660 -0.83%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs