AMZN might well become a meme stock in 2023 . . . twice. First on the short side while the dead cat is falling and again after the dead cat hits the sidewalk. Be certain to get rid of it before the dead cat heads back towards the sidewalk though. Dead cats rarely bounce twice.
The featured image is courtesy of warriortrading.com.
The image isn’t entirely accurate, but close enough. It is true that some dead cats bounce down a flight of stairs as they are gasping and twitching their last. If you find one like that, have brass balls and nerves of titanium, you can make a lot of money spotting and timing the bounces. Timing the market is a fools game so it helps to be a fool when trying that.
Amazon’s Downward Spiral
I’ve written about Amazon’s downward spiral many times on this blog and my geek blog. Down-bound meme stocks require a special level of stamina. I don’t play them. Yes I can see them, everyone can see them if they look. It requires you have a margin account and sell short . . . a lot.
Hedge funds like to short and someone saw it, which is how GameStop became a meme stock in the news. It went from somewhere around $5/share up to around $380 before the dead cat came back down. One the plus side I heard the company sold a bunch of shares at/near the high so they were able to shore up finances for a while.
Those who played the Amazon failure last year should have made out well. AMZN became the first company ever to lose $1 trillion in value according to this report. If you were shorting it from the high you did good. Investment rags are even questioning if it is a buy while it is down almost 50%.
Even had to shutter its telehealth brand Amazon Care.Quote from above article
I was off on the year when I wrote this, but not the outcome. You can’t use AGILE on shit that has to work.
The Dead Cat
Even Motley Fool is taking note of the dead cat AMZN with articles asking about the bounce. Most people don’t realize a stock has to be a dead cat before it can bounce.
Amazon has reported massive losses in its e-commerce division of more than $8 billion through the first three quarters of the year.The Motley Fool article above
When I wrote my latest book I stated that “Amazon is now where Sears was.”
Sears once owned the catalog industry, eventually pissed enough people (customers) off, had a management team that built the Sears Tower as a testament to the size of their manhood, went bankrupt at catalog and got out. The motto used to be “Nobody ever got fired for buying IBM” but quite a few people should have been.
Amazon once owned the e-commerce industry, eventually pissed enough people (customers) off, had a management team focused on building a rocket for joy rides into space as a testament to the size of their manhood, are currently going bankrupt at e-commerce soon to be followed by the other divisions into Sears-like death spasms.
I wrote a blog post about a the fake recession in the news. You probably haven’t read it so here is the minimum you need to know. Not only did AMZN lose $1 trillion in value in 2022, Big Tech lost $1 trillion in 3 days.
This article has a really great stat to quote.
The top 10% owned a record 89% of individually held corporate equities and mutual fund shares at the end of 2021.CNBC article above
NPR’s Marketplace had a statement last night that something like 24% of all stocks are held by the top 1%. Of course those people want to trumpet about a recession, they are losing their collective asses.
The Dominoes are Falling
Hedge funds like to play the dead cat bounce. The problem is they refuse to believe just how far down the pavement is. Microsoft has taken over as the most long position in hedge funds according to this source.
Goldman-Sachs keeps buying AMZN. My guess would be they have to because some part of the company is probably holding a bunch of shares that lost half their value. They are also laying off up to 4,000 employees under the cover of the recession story vs. the we have money in shit investments story.
Amazon to layoff more than 18,000 workers. Yeah, that move won’t piss off any more people (customers) who stop doing business with them. Off-hand I would say at least 18,000 customers will be walking out the door when they get pink slips. Add to that their immediate family and anyone who can listen on-line.
Amazon is trying to segue into a social media platform. Excellent timing given a Seattle school has become the first of many to sue social medial companies over harm they cause children and the burden placed on schools by them. Big Tech has become Big Tobacco and you young-ins will have a front row seat to the endless parade of lawsuits to crush the industry.
Because Amazon is such a shiny-happy place to work its workers have been unionizing. They even managed to get busted trying to bust the unions. That leaves you with lots of happy consumers because that was on the evening news many times.
Last One Holding Amazon Loses
It doesn’t matter what the down bound meme stock is, last one left holding the bag looses big. As long as smoke can be blown up the most southerly orifice of the hedge funds they will keep buying it hoping to make a killing on the dead cat bounce. At some point fear sets in and the first one tries to get out. There isn’t enough stupid people in the market to absorb a position that size so the bottom falls out. If you are old enough to read this, then you are old enough to have lived through The Big Short. Once the first person smells the feces in the bag and begins selling there is no stopping that cat from hitting the pavement. Usually, it doesn’t even bounce.