Amazon buys Zappos

Ok. Amazon just bought Zappos for $807M in stock and $40M in cash.

From a money standpoint, if Amazon thought their stock price was over valued, buying w/ stock is a great idea. Investors thought so. The stock is up 1.36% after the announcement.

So did Amazon overpay? I guess we’ll see. That $807M in stock could turn into $500M or $1B depending on where Amazon’s stock price goes. I wonder how long the Zappos investors have to hold onto the Amazon stock?

From a operational point of view, this merger makes sense. I’m sure the Zappos team has gone as far as they could go and it was time for the shareholders to get paid. I wonder where this ranks for purchases?

Here is what Zappos’ CEO, Tony Hseih, had to say (CEO Letter).

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