In this week’s video blog post, I look at Amazons business model, top 5 risk factors, and contingent liabilities outlined in the company’s annual report.
In the recent months, Amazon has gained a lot of attention since it is a key online retailer during this ongoing pandemic. As value investors, it is important to review the company’s fundamentals before deciding to invest in any company. Hope you all find this 15 minute video blog interesting. Since this is a long video, please feel free to use the time stamps in the video if you only wish to watch certain topics.
Amazon is divided into 3 business segments – North American, International, and Amazon Web Services (AWS). The North American and International segments consists of online sales and subscription revenue. The AWS segment consists of revenue from cloud storage, computing, database, etc.
The top 5 risk factors I discussed are:
- Amazon Faces Significant Inventory Risk
- We Face Risks Related to Adequately Protecting Our Intellectual Property Rights and Being Accused of Infringing Intellectual Property Rights of Third Parties
- Government Regulation Is Evolving and Unfavorable Changes Could Harm Amazon’s Business
- Amazon Faces Additional Tax Liabilities and Collection Obligations
- Amazon’s Supplier Relationships Subject Them to a Number of Risks
0:00 Introduction / Business Overview
2:03 Top 5 Risk Factors
8:01 Contingent Liabilities
10K Annual Report: here
Morningstar Key Ratios Link: here.
Company overview: Amazon.com, Inc., is an American multinational technology company based in Seattle, Washington. Amazon focuses on e-commerce, cloud computing, digital streaming, and artificial intelligence. It is considered one of the Big Four technology companies, along with Google, Apple, and Facebook.
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