Amazon Plummet Continues for the 3rd Straight Day
Amazon stock continued to fall Tuesday morning after two days of major losses on Wall Street.
Early trading saw the stock dip as much as 3 percent from Monday’s close, although the stock rose from that level until about noon it was hovering 10 to 15 points below Monday’s closing.
Amazon’s stock has been declining since Thursday, when the online retail giant produced a disappointing earnings report. Amazon also projected that revenue would not increase at the 20 percent level, something not seen since 2014.
When Monday’s losses were added to those the stock suffered on Friday, the overall loss of 13.7 percent was the biggest two-day dip for Amazon since February 2014, when its stock fell 14.1 percent, CNBC reported.
Over the past month, Amazon’s stock is down about 25 percent.
The declines have cost Amazon CEO Jeff Bezos big time, according to Forbes.
The tumble Amazon stock too cost Bezos $11 billion on Friday and $8.2 billion Monday, but did not displace him from being the world’s richest person according to Forbes.
Although Amazon’s decline was part of a broader dip on Wall Street Monday, one analyst shrugged off the broader implications of Amazon’s fall.
“These growth stocks just got so over-valued it is only natural to see some air come out of that balloon. That could continue for a while,” said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco, according to Reuters.
“But in terms of the rest of the market that doesn’t have those kinds of extreme valuations, I think we are probably pretty close to the end of the decline,” Massocca said. As of noon Tuesday, the Dow Jones Industrial Average was up more than 200 points.
A CNBC survey of several analysts showed consensus that Amazon remained a good investment.
“We continue to believe (Amazon) represents the best risk/reward in Internet given the relatively early stage shift of workloads to the cloud, the transition of traditional retail online, and share gains in its advertising business, the long-term benefits of each we believe the market is underestimating for Amazon,” Heath Terry of Goldman Sachs said.
“Overall, Amazon remains a top pick and is on our Analyst Focus List,” Doug Anmuth of J.P. Morgan commented.
The only cautionary recommendation to hold and not buy came from Edward Yruma of KeyBanc.
“(Amazon) posted a solid 3Q, but for the time being, the core retail business is entering a phase of slower growth,” he wrote.
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