Some days investing and analysing the markets is complex and fraught with confusion.
On other days you’re presented with the chance to buy shares in the world’s largest retailer at a 20% discount imminently before the busiest and most lucrative shopping weeks of the year.
If you looking for a list of reasons why the going’s getting tougher for Amazon.com Inc (NASDAQ:AMZN), and, you want to find all the reasons why the market has so aggressively sold off its shares, there are loads of articles like that – but this is not one of those.
Sure, it missed analyst forecasts for the third quarter.
And, sure, in the worst consumer environment since the early 1980s it could only muster 15% growth from last year.
Meanwhile, it is forced to cut costs and downgrade its forecasts for the rest of the year.
But, also, Amazon is not going anywhere and its dominance over the western world’s retail sector is seemingly unshakable.
Stock analysts point out that Amazon’s disappointing performance is a red flag warning for the consumer sector as a whole ahead of the vital holiday trading period.
Ok, so what does that actually mean?
Well, probably, like during the COVID-19 pandemic, it will mean that all the smaller brick-n-mortar and hybrid retailers will be hit even harder.
And as such perhaps Amazon will wander out of this phase of downturn and recession with even greater market share.
Bad day for Bezos and his investors
Swathes of retail investors will today feel scorn as they check portfolios after Thursday’s slump.
So will the scores of fund managers that have poured billions into what realistically remains the most cash generative of all the so-called FAANGS.
Much is made of Elon Musk being the ‘world’s richest man’ (not including whichever unfamous Saudi or Chinese that we can’t account for), nevertheless, even after all the recent ‘wealth destruction’ Bezos still ranks #3 on the Bloomberg Billionaires index with an estimated worth of some US$134bn, after a US$58bn ‘loss’ on paper in the year to date.
Bezos, if he’s feeling sore this morning, can meanwhile look forward to playing with his rocket ships – indeed, last night also brought news of Amazon’s plan to literally as well as figuratively ‘own’ the internet as it advances plans to over 3,000 high-speed broadband satellites to cover the globe from 2026 onwards.
Evidently the sky is no limit for Amazon’s appetite to grow and dominate the digital economy (without wanting to labour the point heavier still, the very page you’re reading right now is brought to you via AWS).
Elsewhere, spare a thought for poor Mark Zuckerberg who seems to get poorer by the day as weakening social media advertising business coincides with his expensive metaverse obsession, leaving a US$100bn dent his personal wealth in the year to date. He’s now worth ‘only’ US$38bn according to the Bloomberg rankings.
So, to recap, amidst soaring inflation, the cost of living crisis and omnipresent fear of recession don’t forget to find time to feel sorry for the world’s super rich tech billionaires …
But, perhaps more importantly, its almost certainly too early to write off Amazon - the company that after “plummeting” is today still worth over one trillion dollars.