Source: Wikepedia

Dear Diary,

E-commerce giant Amazon.com has raised $6 billion in debt financing. Investors readily throw their money into the River of No Returns.

Lenders are demanding a yield of 3.8% for Amazon's 10-year bonds. That's 150 basis points over the US Treasury's 10-year borrowing costs. (A basis point is 1/100th of one percentage point.)

Amazon's bond buyers worry neither about the return on their money nor the return of their money.

Holders of the company's stock are even more sans souci. If you look up Amazon's P/E ratio, you'll find it listed as N/A – for “non-applicable.” That's because the company is losing money.

After 20 years, Jeff Bezos's online marketplace has never learned how to make a profit. The last quarterly report showed it with losses of about $1 a share – or about $2.50 on every hundred dollars of sales.

Epic Fail

Reports Fortune magazine:

Amazon's Fire phone, dubbed a “shopping machine,” is a flop. The device, which the company introduced in June, led to a $170 million write-down last quarter and a lowered sticker price of just 99 cents.Tom Szkutak, the company's chief technology officer, toldFortune in October that the phone was “priced wrong.””I've made billions of dollars of failures at Amazon.com,” [Bezos] said. “Literally billions. […] Companies that don't embrace failure and continue to experiment eventually get in the desperate position.”

Some of Bezos' billion-dollar mistakes include a site for auctions, which didn't work. That effort evolved into something called zShops, which also failed. The idea eventually evolved into Amazon Marketplace, which now represents 40% of Amazon's unit sales, Bezos said.

So generous and undemanding are Amazon investors – in both its debt and equity – that Bezos feels no pain from his many failures. Every flop and failure makes him richer. He learns nothing.