Amazon’s Acquisitions, Tesla Model 3 and Others

Recently, Amazon made a big splash in the press when it announced it was buying Whole Foods for $13.7 bn making that it’s highest ever acquisition in the company’s history.

That purchase was to be expected as Amazon has been fighting to break into the grocery retail game for a while. At the same time, Walmart was trying hard to encroach on it’s ecommerce turf so it only made sense to hit it back at it’s own strong suit. Plus dominating groceries is the final link for Amazon to fully own retail.

However, there are plenty of other acquisitions that went down at Amazon, about $633 million’s worth in the past quarter alone) and when looked at holistically, it gives us some insights as to where the company is looking at for it’s continued growth and innovation. So without further ado, here are the companies Amazon has bought this year:

GameSpark for $10 million: this company runs game development platform and allows other game developers to use it’s back end servers to develop their own games. This integrates well with Amazon’s Twitch platform and Amazon Web Services which is looking for ways to increase it’s uses as the cloud wars heat up.

Souq.com for $580 million: this is the Amazon of the Middle East. This is the pursuit of horizontal growth, which helps Amazon push into the Middle East and augment it’s drive to enter into the Indian market. The Middle East is relatively rich and loves to buy stuff, so this is a no brainer.

Graphiq for Undisclosed amount: Amazon bought this data visualization, AI search company to help Alexa get better at search and AI and arguably to make Amazon’s market places work better with its devices like Echo and co. My thinking is that they likely bought this company for around $43 million, since that would be what’s left of their $633m in acquisitions after you account for Souq and GameSpark.

Tesla Model 3

Tesla’s Model 3 has started going out for deliveries today, which is great. The stock has had a hard time in the past few weeks but it’s stayed up nicely, primarily because a lot of investors expect Model 3 to do well in the market. The company is definitely doing it’s best to make that happen, as it simplified a lot of the car’s options so as to make production easier and faster. Apparently, the company can make 500,000 Model 3s in the same time it takes to make 50,000 Model Ss. But the car still comes with the full load of sensors and technologies to ensure that the car can keep up with updates in Autopilot capabilities.

All in all, this car is incredibly good and for the price target, of around $35,000 I’m expect it to do really really great.

To succeed beyond expectations would still require more aggressive charging station, marketing and show room investments and with Tesla’s stretched capital situation, we’re not out of the woods yet. I might still exit the building. We’ll have to see.

 

 

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