Amazon chief Jeff Bezos remains unapologetic over the firm's poor financial results, and is not yet ready to give up on the Fire Phone.
At a rare public appearance on Tuesday, Bezos noted at a conference in New York that he spends only six hours a year on investor relations, despite shareholders becoming increasingly unhappy about the online retail giant's spending habits, lack of transparency and financial results.
As noted by Reuters, the company's shares have fallen by over 18 percent this year, despite a rise in the Nasdaq.
In October, Amazon reportedthat fell below investor expectations. The e-commerce giant reported a net loss of $437 million, or 95 cents per share, while Wall Street predicted a loss of 76 cents per share on revenue of at least $20.84 billion.
At the conference, Bezos commented:
We are a large company, but we are also still a start-up. There is a lot of volatility in start-ups.
The Amazon chief defended the firm's culture and willingness to splash out on new projects, even if they turn out to be tech turkeys like the Fire Phone. The Fire flop resulted in Amazon taking a $170 million charge "primarily related to Fire phone inventory valuation and supplier commitment costs."
In October, Amazon executive David Limp admitted that the mobile device's price point, especially as a late contender in the smartphone arena — already dominated by the likes of Apple and Samsung.
As reported by Re/Code, Bezos did not label the mobile device a failure, but said "it’s going to take several iterations" before he can judge the project properly, and that his judgment on the project should be sought "in some number of years."
"I have made billions of dollars of failures at Amazon.com [...] literally," Bezos said. "You might remember Pets.com or Kozmo. None of those things are fun. They also don't matter. Companies that don't continue to experiment, companies that don't embrace failure, eventually get desperate."
On Monday, investor service Moody's downgraded its outlook on Amazon to negative from stable, issuing the retailer the Baa1 senior unsecured rating. The company cited upcoming debt through the issue of new senior unsecured notes as a primary reason for the downgrade.
Moody's Vice President Charlie O'Shea commented:
Proceeds are to be used for general corporate purposes in support of Amazon's myriad growth initiatives, and it is Moody's expectation that the funds will not be utilized for any form of shareholder returns.
While Moody's rating is just three notches above junk, Standard and Poor's does not agree with the firm's rating, and has given Amazon a double-A-minus grade, which is four notches higher.
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