Is Amazon (NASDAQ:AMZN) labeled as a shaky business by Wall Street?
Alibaba (NYSE:BABA) and Amazon (NASDAQ:AMZN) both, at this point, stand on cloud 9 – with outstanding offerings, like the market cloud services; business to business products; and also the e-commerce portals. The only difference between the two is that Alibaba (NYSE:BABA) has the Chinese market wrapped around its little finger and Amazon (NASDAQ:AMZN) is solely focused on the American market. Amazon (NASDAQ:AMZN), the American international electronic commerce company has lately hit a low. It once was the world’s largest internet company, in terms of revenues and number of employees. Amazon, which once started as an online bookstore, soon stepped into selling DVDs, VHSs, CDs, video and MPS streaming, software, video games, electronics, apparels and now also furniture, food, toys and jewelry. The company also launched the Amazon Kindle, Kindle Fire tablets, Fire TV and Fire Phone as well as cloud computing service. But for investors it is a game of numbers – for them, Amazon’s (NASDAQ:AMZN) 52 week total is of $408 dollars.
The last quarter showed revenues rising by 23% resulting in $19.3 billion but after bearing the loss of $126 million and showing no sign of recovery any time soon, Wall Street and Amazon opponents analyze this as reckless measures of risk taking by founder Jeff Bezos.
Predictions of the fourth quarter stand at net sales to be between $19.7 billion to $21.5 billion or a growth rate of 15% and 26% as compared to last year’s third quarter. The operating loss is forecasted between $810 million and $410 million – which is much higher than the company’s $25 million last year.
There are also no expectations of any business acquisitions, restructuring, any sort of investments or legal settlements for the year. Hence the stock compensation are calculated at $410 million with not many chances of growth available.
Besides the financial figures of return, Wall Street was disappointed at the sales of Fire phones, which carriers sold for as low as $.99, with long term wireless contracts. Amazon (NASDAQ:AMZN) on the other hand has also reduced its prices for Fire TV, from $99 to $84. It also makes it a point to keep its hardware unit sales like Kindle Fire a secret, along with the number of subscribers it has for Prime Package video streaming and other available offers like shipping etc.
Investors have started perceiving Amazon (NASDAQ:AMZN) as less of a money making machine but more of a lab where experiments are conducted for video streaming and other electronics.
The above situation has made investors nervous about Amazon’s (NASDAQ:AMZN) future regardless of the claims made by the company, that Jeff Bezos is a visionary with long term plans lined up. That has done very little to shake up stock buyers.
Amazon (NASDAQ:AMZN) now needs to buckle up and set their objectives and strategies in line as its failures and successes are both being watched and analyzed closely by Wall Street. The company does not want to find itself in a situation where its stock value goes down and investors back out.