4 Big-Name Spinoffs We Might See Soon

M&A is giving way to spinoffs as the preferred path to value

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4 Big-Name Spinoffs We Might See Soon

AMZN Stock — Amazon Should Shed its Cloud Computing Arm

AmazonComLogoWhite 4 Big Name Spinoffs We Might See SoonDon’t laugh — it’s more likely than you might think.

A little more than a year ago, Oppenheimer analyst Tim Horan recommended Amazon (AMZN) spin off its cloud-computing business, Amazon Web Services (AWS). The idea wasn’t especially well-received at the time, though most saw the broad upside of such a split — more of Amazon’s e-retail rivals might be willing to tap the highly-profitable AWS if that service provider wasn’t ultimately controlled by a competitor.

The downside of spinning off Amazon Web Services is that it would expose the e-commerce aspect of the company for what it is … a cash-burning operation that may never find its way out of low-marginville. That could eventually be devastating for AMZN stock.

Well, the heat may now finally be turned up enough to get the discussion going within Amazon’s war-planning room. Why? After nearly fifteen years of capital expenditure growth that’s moved in lock-step with revenue growth, AMZN stock owners may finally be losing patience.


Article printed from InvestorPlace Media, http://investorplace.com/2014/05/spinoffs-amzn-stock-aapl-stock-msft-stock-mrk-stock/.

©2014 InvestorPlace Media, LLC

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