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Illustration: Rae Cook/Axios

Major media acquisitions — like AT&T and Time Warner — almost never work out, and are therefore very hard to justify to shareholders. Amazon doesn't have that problem: It's so big that it doesn't need to justify any of its spending.

Why it matters: Amazon is one of the most valuable companies the world has ever seen, with a market value of $1.65 trillion and revenue over the past year of some $420 billion. It makes multibillion-dollar decisions on a regular basis, many of which (the Fire phone, drone delivery) turn out to have been terrible ideas.

  • So long as the company as a whole continues to grow at a torrid pace, its shareholders have learned not to second-guess its strategy.

Driving the news: Amazon is spending $8.5 billion on MGM studios — a very rich price that would raise eyebrows and drive investor skepticism were anybody else to do it.

  • Amazon, by contrast, in its press release, doesn't see the need to justify the acquisition at all, beyond vaguely promising to "reimagine" some of the studio's intellectual property.

By the numbers: $8.5 billion is well below the $10.3 billion that Amazon made in pretax income last quarter. It's also only about 12% of the company's $71 billion in cash, which has been sitting and waiting to be put to work somehow.

The big picture: Amazon doesn't pay a dividend and doesn't even do stock buybacks. Its "Day One" philosophy involves aggressively reinvesting its cash flow into new businesses and opportunities.

So far, that's worked out spectacularly well for shareholders — even with a few inevitable missteps along the way.

The bottom line: There is potential upside here. But if this deal ends up being a bust, shareholders are unlikely to care — just so long as Amazon as a whole continues on its path to global domination.

Go deeper: How Jeff Bezos' appetite for risk is broadening

Go deeper

Ben Geman, author of Generate
Aug 30, 2021 - Economy & Business

Why Rivian's IPO is worth watching

Rivian R1T electric truck. Photo: Rivian

Rivian, the well-financed electric vehicle startup about to start delivering its pickup truck, says it has filed plans to go public with securities regulators.

The big picture: The company is quite well-capitalized. Rivian's financial backers include Ford, Amazon and BlackRock.

Updated 1 hour ago - Politics & Policy

Congressman criminally charged with lying to feds

Rep. Jeff Fortenberry. Photo: Al Drago/Bloomberg via Getty Images

Rep. Jeff Fortenberry (R-Neb.) has been indicted on charges he falsified records and lied to federal investigators probing an illegal foreign donation scheme, the Justice Department announced on Tuesday.

Driving the news: DOJ says a Fortenberry associate, who later cooperated with investigators, informed him he'd likely received illegal donations from an intermediary for a foreign national, but that Fortenberry denied any knowledge of such a scheme when contacted by the FBI.

"Assassin's Creed," but for schools

"Viking Age: Discovery Tour." Image via Ubisoft

For the third time since 2018, Ubisoft is releasing a nonviolent version of its latest “Assassin’s Creed” game as part of a unique effort to turn one of the medium’s most popular series into an educational tool.

Driving the news:Viking Age: Discovery Tour” transforms last year’s “Assassin’s Creed Valhalla” from a bloody 150-hour game about Viking conquest in 9th century England into a peaceful four-hour game about merchants and monks.