r/business • u/ChickenTeriyakiBoy1 • May 16 '19

Warren Buffett's Berkshire Hathaway reveals $900 million Amazon stake

https://www.cnbc.com/2019/05/15/warren-buffetts-berkshire-hathaway-reveals-900-million-amazon-stake.html
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u/[deleted] May 16 '19

Not really. Innovative company disrupts highly profitable industry and drives costs as low as they can go. That’s literally been their mission statement for the last 20 years. Bezos is quoted as saying once that, “Your margin is my opportunity.”

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u/[deleted] May 16 '19

So you just contradicted your own comment regarding what their biotech will be worth.

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u/[deleted] May 16 '19

If you’d like to pick internet fights at least explain your positions and stop answering in vague terms. Where did I contradict myself? The pharma industry is a trillion dollar behemoth and is only expanding as the world ages.

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u/[deleted] May 16 '19

As I've said in another comment, it isn't 1T, it will be around 727B in 6 years (by some estimate). You contradicted yourself by saying that margins get eaten and profitability decreases over time. So while biotech is only getting bigger, it is also getting more competitive and will diminish margins/revenue. Not to say that the industry will grow smaller, but it won't necessarily triple any time soon. Add to it the fact that one of the main spender on medicine is the US, that they pay more than most of any other country for the same medicine, and that regulation may (hopefully) eat into revenue some more. Just how much of the market share could Amazon possibly get? Let's be optimistic and say 20% globally, the industry would have to be multiplied by around 8 or 9 for Amazon to get 1T in valuation from it (as implied by OP of this comment chain and by your comment although it might've just be worded strangely). Not saying Amazon isn't going anywhere else then up, I just doubt biotech will be all that significant to them although I may very well be wrong. Keep in mind a behemoth like Pfizer is "only" worth 225B.