Amazon Twitch Acquisition - Paying 70x Sales

NOVEMBER 1, 2014

Just an aside from reading the recent Amazon 10-Q. In Note 4 on acquisitions they state:

On September 25, 2014, we acquired Twitch Interactive, Inc. (“Twitch”) for approximately $842 million in cash, as adjusted for the assumption of options and other items. During the nine months ended September 30, 2014, we acquired certain other companies for an aggregate purchase price of $20 million. Acquisition activity for the nine months ended September 30, 2013 was not material. We acquired Twitch because of its community and the live streaming experience it provides. The primary reasons for our other 2014 acquisitions were to acquire technologies and know-how to enable Amazon to serve customers more effectively.

and then in th pro-forma add:

The acquired companies were consolidated into our financial statements starting on their respective acquisition dates. The aggregate net sales and operating loss of the companies acquired was $12 million and $3 million for the nine months ended September 30, 2014.

This means that Amazon acquired Twitch for approximately 70x sales! (Earnings multiple is negative since Twitch was losing money it would appear).