As long as you don’t need to use new equity to raise cash, you are golden. You can use nearly all your free cash flow for growth. And you can mostly ignore the analysts, the fund managers, and other assorted grifters on Wall Street. And in the end, the stock price works itself out over time anyway. Look at Amazon for a perfect example of this.
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EXACTLY!!!
Tesla used the shortages brilliantly by raising prices to match demand to supply fattening the piggy bank. What did the analysts say? “The average person cannot afford these expensive vehicles.” When supply grew and Tesla lowered prices to match demand to supply what did analysts say? “Falling margins are going to kill Tesla.”
That’s what happens when your horizon is only one or two quarters away.
The Captain
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What were Amazon’s margins for the first 20+ years? Or all the years for that matter?
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