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THE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & LifestyleTHE BIZNOB – Global Business & Financial News – A Business Journal – Focus On Business Leaders, Technology – Enterpeneurship – Finance – Economy – Politics & Lifestyle

Finance

Finance

Amazon Stock Dips 9.5 Percent

via Ted S. Warren/AP via Ted S. Warren/AP
via Ted S. Warren/AP via Ted S. Warren/AP

Sales aren’t everything, and to some investors, margins might matter more. Amazon has improved sales by over a quarter in the last twelve months, but that didn’t stop the stock from dropping 9.5 percent in after-hours trading. In the past year alone, Amazon has launched its own smartphone, set-top TV device and a new e-book service offering unlimited downloads for a monthly fee. It seems that all this new research and development has made investors a little nervous.

Stockholders have a good reason to be nervous. Besides Amazon’s Kindle line of tablets, the company has little history to justify such aggressive product development. It doesn’t mean it is wrong. On the contrary, it will most likely be the right move.

The greater contributing factor to the devaluation of almost 10 percent of Amazon’s stock is the $126 million net loss the company reported for the second quarter. According to Forbes, Thomson Reuters’s poll estimated that the stock would finish around 27 cents down, with net sales coming in between $18.1 billion and $19.8 billion. And while no one was happy with Amazon’s performance, there was no one more disappointed than Jeff Bezos.

It’s approximated that Bezos lost $3 billion of his net worth from the stock’s plunge. Forbes now estimates that he’s worth $29.8 billion and still cracks the list of top 25 richest people in the world. All is not lost, though; Amazon expects third-quarter figures to close somewhere in between $19.7 billion and $21.5 billion. That would allow the company to experience a 15 to 26 percent growth over where they were last year.

 


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