by Michael Tarsala
There’s one big difference between Amazon (AMZN) and Facebook (FB), says Eric Steiman, manager of the Undervalued Opportunities investment model.
Amazon has built up years of trust with investors that and Facebook has yet to do that, Steiman told the E-Commerce Times in an interview.
That’s why he says Amazon got the benefit of the doubt with its Q2 earnings, and Facebook did not.
Amazon reported a 96% drop in net income and saw its shares rise. Amazon investors know that the company is spending on an acquisition and for expanding its network and distribution center, so they are not so worried, Steiman said. They see a payoff in the future.
“We saw negative numbers from Facebook, and the Street is punishing it for them,” Steiman said in the interview. “Amazon, though, is fine — and that is because it is building for the future, and it has a plan that people can see and understand.”
Facebook beat analyst expectations and was still clobbered. Some may be less sure about Facebook’s growth path, even though CEO Mark Zuckeberg dedicated most of the company’s post-earnings comments about the company’s long-term plans.
Check out the full E-Commerce Times interview here.
