Amazon.com is the world’s first public company to lose a trillion dollars in market value. This is a result of a combination of rising inflation, tightening monetary policies and disappointing earnings updates that triggered a historic selloff in the stock this year, according to a Bloomberg report.
It added that Amazon’s shares fell 4.3 per cent on Wednesday, pushing its market value to about $879 billion from a record close of $1.88 trillion in July 2021. Microsoft has also lost $889 billion from a November 2021 peak. This year, top-five US technology companies by revenue have witnessed about $4 trillion in market value.
Recently, Amazon’s shares declined 13 per cent after the company issued a disappointing fourth-quarter forecast and missed on revenue estimates. Amazon’s net sales stood at $127.1 billion in the third quarter ended September 30, lower than analysts’ expectations of $127.46 billion, according to IBES data from Refinitiv. For the holiday quarter, the world’s biggest online retailer forecast net sales of between $140 billion and $148 billion versus expectations for $155.15 billion.
Operating income decreased to $2.5 billion in the third quarter, compared with $4.9 billion in the third quarter of 2021. Net income decreased to $2.9 billion in the third quarter, or $0.28 per diluted share, compared with $3.2 billion, or $0.31 per diluted share, in third quarter 2021.
Free cash flow decreased to an outflow of $19.7 billion for the trailing twelve months, compared with an inflow of $2.6 billion for the trailing twelve months ended September 30, 2021.
Amazon CEO Andy Jassy said, “There is obviously a lot happening in the macroeconomic environment, and we’ll balance our investments to be more streamlined without compromising our key long-term, strategic bets. What won’t change is our maniacal focus on the customer experience, and we feel confident that we’re ready to deliver a great experience for customers this holiday shopping season.”
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