Amazon.com’s (NASDAQ:AMZN) new $79 Kindle e-reader make my make main street happy but the company can’t be smiling about the amount of money it may make from it. According to market research firm IHS iSuppli, the new e-reader costs $84.25 to make. This includes a $78.59 cost of materials and $5.66 cost to put them together.
Amazon thinks it will make up for the losses with embedded advertising and stoking sales from the e-reader.
While the low-price Kindle may incur production losses for the company, Amazon can look to their new e-reader, the $199 Kindle Fire, to be a bright spot. The company has reported strong consumer interest and it will increase 2011 orders to 5 million, up from the previous 4 million. In the middle of the third quarter, the company had already increased orders by 500,000.
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Cisco Systems, Inc.’s (NASDAQ:CSCO) stock jumped after announcing a strong first quarter fiscal 2012 report and solid second quarter fiscoal 2012 guidance. During the company’s conference call, comments about strong switch and router orders along with improving switch margins may have contributed to the stock rise.
Citi upgraded the shares to Buy but noted that low second quarter fiscal 2012 expectations, improving growth and margins will help the company move toward multiple expansion.
Take-Two Interactive Software, Inc. (NASDAQ:TTWO) reported a weak guidance and mixed second quarter fiscal 2012 results on Wednesday and saw its shares rise. Now after announcing a $200 million convertible debt offering today, the stock is plummeting. The company plans to use the proceeds for “general corporate purposes,” or maybe acquisitions.
It ended September with $269.7 million in cash and equivalents while carrying $111.3 million in debt.
Groupon, Inc.’s (NASDAQ:GRPN) stock is up today after losing 14 percent of its value between its post-IPO open and Wednesday’s close. With the company’s small float (less than 5 percent) and a lack of options trading, shorting the stock could be a risky move in the near-term, according to fund manager Todd Sullivan.
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