Investor David Einhorn and former Microsoft CEO Steve Ballmer finally agree on something — it just happens to be Amazon.
Echoing the former Microsoft CEO’s sentiments about the online retailer, the Greenlight Capital hedge fund manager (who made headlines in 2011 by calling for Ballmer to resign) today added Amazon to his “Bubble Basket” of stocks to short, writing this in a letter to shareholders:
AMZN’s recent disappointment is notable in that for years, the story has been that AMZN isn’t profitable because it is growing so fast. Now growth is slowing, but rather than unleashing higher profits, the slower growth is leading to even greater losses. One of the principal bullish assumptions supporting many bubble stocks is, “the company is growing too fast to be very profitable.” We think AMZN is just one of many stocks for which this narrative will ultimately prove false.
Amazon has been under fire since posting a deeper-than-expected loss for the third quarter. Amazon shares are down 1.5 percent in trading today and down 17 percent over the past year.
Ballmer made headlines of his own two weeks ago by telling Charlie Rose about Amazon, “In my world, you’re not a real business until you make some money. I have a hard time with businesses that don’t make money at some point.” Here’s the video of that discussion.
