Amazon For Kindle Fire: Is it possible that Amazon.com, Inc. (NASDAQ:AMZN) is below this quarter's revenue guidance? While there is no reason to panic, many are beginning to wonder why the company is offering a promotion on its Kindle Fire HD 8.9 device.
The tablet usually retails for $299, but for a limited time is being offered for $249. While this is a great deal for consumers – being that this is the most expensive Kindle on the market – it doesn’t seem to make a lot of sense for the e-commerce giant. With so many units being moved, a $50 discount is a big deal. This is more than enough to result in lower quarterly earnings, potentially by as much as 1%.
So, what’s the deal?
The most obvious answer is that Amazon.com, Inc. (NASDAQ:AMZN) has an overabundance of these devices in stock. But is it possible that they are selling it at a loss? At least one person thinks so, as a writer at Seeking Alpha explains.
If excess inventory is not the answer, it is possible that the company is "running light on revenue." This sale may be the company’s best option for boosting quarterly earnings. After all, the Kindle Fire HD 8.9 is a high price tag, popular device. In other words, the company knows that dropping the price is sure to attract a larger audience, especially during the busy holiday shopping season.
At this point, everybody is guessing as to what Amazon has up its sleeve. Are they looking to boost revenue? Are they simply trying to move a large number of units, thanks to an overabundance in stock?
Over the next few weeks, we may get a better idea of what Amazon.com, Inc. (NASDAQ:AMZN) was thinking. In the meantime, let the guessing games continue. Regardless of what happens next, there are many who feel that Amazon’s good stock fortune is about to come crashing down, as detailed in our recent take: Is Amazon's Rally Coming to an End?
Let us know your thoughts on the Kindle Fire deal in the comments section below, and if you're considering making any investment decisions based off of the promotion.
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