Aswath Damodaran touts Amazon’s evolution and warns of meta-growth plunge

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  • Aswath Damodaran praised Apple’s caution with its cash flow and Amazon’s constant evolution.
  • The finance professor rejected Facebook’s name change and said the company’s growth phase was over.
  • Damodaran questioned Disney’s content spending and warned that GE was on its last legs.

Aswath Damodaran hailed Amazon’s continued evolution, warned that Facebook’s growth phase was behind it, and hailed Microsoft’s proposed takeover of Activision Blizzard at the Pivot MIA conference in February.

The NYU Stern School of Business finance professor – whose nickname is the ‘Dean of Valuation’ – has also applauded Apple’s cautious spending, predicted GE’s demise and questioned Disney’s huge investments in its Disney Plus.


diffusion

Platform. His remarks were broadcast on a recent episode from the Pivot podcast.

Here are Damodaran’s 12 best quotes from the conference:

1. “The CFO of a young start-up might as well be the janitor. You’re the guy everyone ignores and misses — because really, what are you going to do? not make this company great again.” (Damodaran noted that CFOs add value later in a company’s lifecycle, when its investments become less lucrative and it wants to lower its cost of capital.)

2. “Amazon is a company I’ve enjoyed every year since 1997. Talk about a book that never ends, right? Every time you think you’re getting to the last chapter, they find a way to It’s like a sequel on a sequel, on a sequel. It’s like ‘Pirates of the Caribbean: Part 55’ and Johnny Depp is still alive, and he’s still drunk, and he’s still doing whatever he did.”

3. “Amazon has an advantage over every other company in the world: patience is in its DNA. I’ve told people who compete with it, ‘I don’t know if Amazon will ever make money, but the one thing I can guarantee you is that you will never make money. It’s almost certain that they’ll cut into trading margins by the time they’re done.”

4. “The only thing that brings Godzilla down is King Kong, and Facebook has met a King Kong big enough to bring them down. At this point, it’s clear they’re not a growth company. Anyone who invests in Facebook thinks 20% growth comes back barks in the wrong tree.” (Damodaran noted that Apple’s rollout of new privacy settings on its devices prompted a backlash from Facebook owner Meta. recent slowdown in user growth.)

5. “There’s no good reason for a company to change its name, is there? Unless you go to witness protection. When Phillip Morris renamed himself Altria and says, “We’re notorious for being toxic,” guess what? Selling cigarettes. It’s not going away. (Damodaran was commenting on Facebook’s renaming to Meta.)

6. “It’s like Alphabet. Google wanted to give the impression that it’s a multi-business company. The reality is that the search box drives the business. It’s like ‘ Snow White and the Seven Dwarfs’, right? You’ve got the search box that provides it all. And you’ve got the Seven Dwarfs that devour your cash flow and income. I always call them Google until I see the rest pay off.

7. “When Walmart bought Flipcart about five years ago for $21 billion, I called it the most expensive facelift in history. Because let’s face it, Walmart is an old company. They want Why? Because they’re competing against a company that seems to have found the eternal fountain of youth (Damodaran referred to Amazon as Walmart’s ageless rival).

8. “Think about how much money they’ve had over the last decade and all the suggestions people make: ‘Buy Tesla, buy


netflix

.’ The reality is that Apple has so much money they can buy Greece, they can pretty much buy whoever they want. What has always impressed me about Apple is the discipline they have shown to do none of this. They’re not in a hurry, they don’t go out to buy things. Hopefully time will be enough of an ally that they can find ways to replace the iPhone franchise, the biggest cash cow in history.”

9. “I’m not usually a fan of acquisitions, but I liked Microsoft’s acquisition of Activision. What they get with Activision isn’t the games. For a $2 trillion company , what’s the benefit of going after this market? They’re small choices. They have much bigger ambitions here. They’re buying a platform. They say their future competitors aren’t Nintendo and Sony; they’re going to be Roblox and Facebook and other gamers who can potentially come after with gaming solutions.”

10. “When I think of Netflix, I think of a hamster wheel. You create more content, you sign up more users. Then you go to markets and say, ‘Look how many more subscribers we have. “. Then you go back and create even more content.”

11. “I’m a little nervous about what Disney is doing with Disney Plus. He’s playing the Netflix game. Next year he’s expecting to spend, what, $33 billion on content? That skews everything. what Disney does as a company.”

12. “It’s a ‘Walking Dead’ business. It’s a zombie business. The only stories you can tell are about how quickly the end will come and how painful it’s going to be. But it did well. operated, 125 years. Shed no tears for GE.”

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