Tag: valuation

Amazon loses $250-billion in 8 weeks

By Jake Kanter for Business Insider US

Amazon has lost $250 billion (R3.7 trillion) in market value since it became a trillion dollar company in September.
It took Amazon 18 years to reach a valuation of $250 billion after first going public in 1997, Fortune pointed out.
Amazon’s quarterly results missed analysts’ expectations and ignited worries that the tech company is facing stronger competition.

If the giant scale of America’s first trillion-dollar companies Apple and Amazon can make movements in their stock price seem a little abstract, then Fortune provided some timely context on Monday.

The publication pointed out just how marked Amazon’s share price decline has been in recent weeks, with a little bit of history about the online retailer, which first went public in 1997.

After hitting the heady heights of a $1.02 trillion valuation on September 4, when it closed at $2,039.51 a share, Amazon has since taken a heavy hit. The company’s share price was down to $1,538.88 on Monday, tearing around $250 billion (R3.7 trillion) off its value in an eight-week period.

Amazon first hit a market cap of $253-billion on July 24, 2015 – 18 years after it first went public.

Macrotrends
Amazon’s quarterly results on Thursday missed analysts’ expectations and ignited worries that the tech company is facing stronger competition. Amazon’s stock has fallen 14% since then – its worst two-day decline since 2014, Reuters said. It relinquished its spot as the second-largest US company by stock market valuation to Microsoft.

Some $200-billion has been wiped off the value of FAANG companies – Facebook, Apple, Amazon, Netflix, and Google – since Thursday, as a stream of Q3 earnings trickle in.

Amazon reaches $1trn value

By Bryan Rich for Forbes 

Today, Amazon became the second company (following Apple) to cross the one trillion-dollar valuation threshold.

This stock is up 72% year-to-date. It has doubled in the past year and has nearly tripled since Trump’s election. That’s what happens when you have a pour gasoline (economic growth) on a fire (a monopoly). No one should love Trump more than Jeff Bezos.

But at 161 times earnings, the market seems to be betting on the Amazon monopoly being left to corner all of the world’s industries. That’s a bad bet.

Much like China undercut the competition on price and cornered the world’s export market, Amazon has undercut the retail industry on price, and cornered the world’s retail business. That tipping point (on retail) has well passed. And as sales growth accelerates for Amazon, so does the speed at which competition is being destroyed. But Amazon is now moving aggressively into almost every industry. This company has to be/will be broken up.

The question is, how will the market value an e-commerce business that would no longer be subsidised by the high margin Amazon cloud business (AWS)? A separation of the businesses would put Amazon’s e-commerce margins under the Wall Street microscope (as every other retailer is subjected to) and materially impact a key sales growth driver for Amazon, which is investment in innovation (R&D).

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