Shareholders cut $16 billion off Amazon's market value, six times what it earned since it went public. Several brokerages cut their price targets. Fred Katayama reports.
Shareholders are getting antsy over Amazon. They took a whack at its amazonian market value, chopping more than 16 billion dollars off of it after the online retailer reported quarterly losses nearly double what was expected and warned of a bigger loss to come. Reuters Breakingviews notes that's more than six times what Amazon has earned since it went public 17 years ago. Amazon founder Jeff Bezos has always taken the long-term perspective, plowing profit back into his ever diversifying lineup of products and services. It's spending $100 million on developing media content for its Prime service in the current quarter alone. It's pouring more money into cloud computing. And Amazon's investing in China, India, Italy and Spain. Analysts are also losing patience. A number of them, including Canaccord Genuity's Michael Graham, slashed their price targets on the stock. Among the things different this quarter, Graham says, "investors are less patient than before regarding ongoing margin pressure." Amazon's stock plunged in early trading, adding onto its loss of 10 percent this year. Breakingviews columnist Rob Cyran says, "shareholders may be starting to wonder if Amazon is getting lost in a limitless jungle of Bezos' ambition." But Bezos shows no signs of subscribing to Wall Street's law of the jungle.