No_Grapefruit4066 t1_je6xk2f wrote on March 29, 2023 at 9:10 PM

Watch the market response to Alibaba splitting into 5 companies. If Amazon does that, we could see a 25% jump from here.

Paradox68 OP t1_je7bul1 wrote on March 29, 2023 at 10:51 PM

I don’t understand the benefits to a shareholder of a company splitting into segments? Also what does this really change? Amazon (and Alibaba) already have a million subsidiaries. This just seems like a dumb way to avert Monopoly regulation to me, but I’ll admit I don’t know all the facts there, obviously.

No_Grapefruit4066 t1_je7ka3u wrote on March 29, 2023 at 11:55 PM

I think the main premise here is that smaller businesses with more focused management will attract investor attention and help reduce the conglomerate discount. These businesses can merge, acquire or divest their businesses with less scrutiny and will be more responsive to activist shareholders.

Given the focus on efficiency rather than growth at all costs, shareholders and regulators may like smaller companies that emerge

This is yet a theory

Paradox68 OP t1_je7nglq wrote on March 30, 2023 at 12:19 AM

Yeah; your premise seems valid but I just don’t buy it for some reason. Anyone with a brain would understand it’s still a conglomerate.

d3nv3rite t1_je8f8eo wrote on March 30, 2023 at 4:01 AM

Amazon is growing into a conglomerate, similar to how General Electric was 20 years ago, where they are trying to do everything. The problem is that each part of their business has different growth opportunities, which in some cases may actually be hurt due to each business unit having to compete with other business units for capital. An example of this is Amazon Logistics. If spun off into a separate company it could rival UPS & FedEx, and 3rd party retailers would be more likely to ship with Amazon if the delivery business is separated from the retail business. Whole Foods also hasn't done very well under Amazon's leadership, as their focus on technology & online delivery has ruined the store experience with "shoppers" filling the aisles to pick internet orders. These are just a couple examples of business units in Amazon that might be worth more if spun off into independent companies.

Paradox68 OP t1_je8fl3j wrote on March 30, 2023 at 4:04 AM

>and 3rd party retailers would be more likely to ship with Amazon if the delivery business is separated from the retail business

Why do you think this? Like I said, anyone with a brain would still understand that it’s still Amazon or owned by Amazon. And that using the business benefits Amazon in one way or another. Retailers don’t ship with Amazon because they are competing with Amazon. Even if it was separated, they would still know that using Amazon to ship would detriment their business inherently by helping Amazon.

Like I said, it’s all asinine.