And Now Amazon Stumbles, Stock Tumbles

Uh-oh:

Jeff Bezos is testing the patience of investors after Amazon.com Inc. (AMZN) missed analysts’ estimates for a second straight quarter, sending the shares tumbling almost 10 percent.

The world’s largest online retailer yesterday reported a second-quarter loss of $126 million, more than double what was predicted, even as sales climbed 23 percent to $19.3 billion. Expenses jumped 24 percent to $19.4 billion.

As a consumer, I love what Amazon does. It’s the first place I go to buy almost everything except for lunch. But investors have been absolutely insane to run up its stock price they way they up, with incredible and unjustifiable P/E ratios. A ten percent drop? That ought to be just the beginning for a company whose expected turn to profits, as John Gruber wrote last year, will probably turn out to be a will o’ the wisp.