Amazon plunges in the stock market: is the world’s first public company to lose a trillion dollars in market value as a combination of rising inflation, tightening monetary policies, and disappointing earnings updates that triggered a historic selloff in the stock this year.
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Shares in the e-commerce and cloud company fell 4.3% on Wednesday, pushing its market value to about $879 billion from a record close of $1.88 trillion on July 2021.
The world’s largest online retailer has spent this year adjusting to a sharp slowdown in e-commerce growth as shoppers resumed pre-pandemic habits. Its shares have fallen almost 50% amid slowing sales, soaring costs, and a jump in interest rates. Since the start of the year, co-founder Jeff Bezos has seen his fortune dwindle by about $83 billion to $109 billion, according to data compiled by Bloomberg.
Shares of Amazon (AMZN -4.27%) finished down 9% last month, according to data provided by S&P Global Market Intelligence.
Disappointing fourth-quarter guidance in the third-quarter earnings report was the main reason for the stock's decline, but there were a number of other news items showing the company shifting into cost-savings mode as it announced hiring freezes or even full-on closures of some smaller divisions.
The stock tracked with the S&P 500 for most of the month but then diverged sharply when its earnings report came out.
The big news last month and the reason the stock plunged 7% on Oct. 28 was that the company expects revenue to increase just 2% to 8% in the fourth quarter. Though that includes a foreign currency headwind of 460 basis points, the guidance signals that this will be the slowest-growth holiday quarter in the company's history.
Like its FAANG stock peers, the company cited macro headwinds for the slower growth, but Amazon may also be reaching a point where it's too big to put up the kind of growth numbers that investors are used to as revenue is set to top $500 billion this year.
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