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Description: Amazon.com’s (AMZN) Jeff Bezos has the kind of investors any chief executive officer would envy. While others must contend with restive shareholders who demand steadily increasing profits or bigger dividends, Bezos has nearly free rein to pursue his strategy of ignoring earnings and spending heavily to expand into new businesses. The stock is up more than 40 percent over the past 12 months, and in March traded at more than 700 times the previous 12 months’ earnings—the highest price-to-earnings ratio of any company in the Standard & Poor’s 500-stock index. It had held that ranking for nine months, losing it only after announcing a loss of $39 million for 2012, which made calculating the p-e ratio pointless.

Source:  Businessweek.com

Date: Apr 11, 2013

Link:  http://www.businessweek.com/articles/2013-04-11/amazon-investors-give-ceo-bezos-room-to-run#r=nav-f-story

Questions for discussion:

  • Explain the attitude of investors toward Amazon stock?
  • What risks exist because of this attitude?
  • Would you be an investor today?

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