Monday, October 23rd, 2017

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Amazon Takes a Hit on Speculations of Loss, But Some See Long-Term Gain

Amazon has spent extensively to improve its shipping worldwide.Netflix has taken the greatest heat from the media recently for its repeated missteps, but it is not the only online service provider to suffer some abuse on the market. Bloomberg notes that Amazon fell more than 13 percent on the news that its investments into the Kindle Fire could lead the company to a $200 million loss in the fourth quarter.

The drop cost the company more than $13 billion in market value and many investors expressed concern about Amazon's plans for expansion, particularly selling the Kindle Fire at a loss.

"What they're willing to do is trade earnings for ever-increasing market share, but at some point you have to make a meaningful profit," Chris Cordaro, head of Regent Atlantic Capital, told Reuters. "We can't be buying something at 100 times earnings. That doesn't make investment sense."

However, the news source noted that the company represents another company that has been willing to sacrifice short-term profits in favor of long-term market dominance.

The Street notes that many financial news sources ignore that Amazon has done much the same before, spending extensively in order to secure greater sales. However, it also notes that some news sources ignore the notable differences between current and past circumstances, notably its increasingly expensive emphasis on shipping.

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One Response to Amazon Takes a Hit on Speculations of Loss, But Some See Long-Term Gain

  1. Marisa says:

    The news media have great effect on the market and on company shares. If I was a business journalist, I would be more careful when I write an article that can affect the position of a whole company in the stock market. It is essential to speak to a company representative and have their take on the situation.

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