“I knew that if I failed I wouldn’t regret that, but I knew the one thing I might regret is not trying.”
~ Jeff Bezos
Amazon Inc. has become the world’s first publicly listed firm to lose a trillion dollars in market value caused by post-pandemic changes.
Amazon Inc. has become the world’s first publicly listed firm to lose a trillion dollars in market value, reported by many reputed news agencies. According to a report, the combination of rising inflation, tightening monetary policies, and disappointing updates of earnings has triggered and resulted in a historic sell-off in the company's stocks this year.
As consumers are coming back to their old pre-pandemic routine, the company, Amazon, being the world’s largest online retailer, has spent 2022 adjusting and abiding to a sharp slowdown in the e-commerce space. The company’s shares have fallen almost 50% amid slowing sales, soaring costs and a higher jump in interest rates. Since the year started, co-founder Jeff Bezos has seen his fortune declining by about $83 billion to $109 billion. Before this month, the company moved to expand an earlier hiring freeze to cover all of the corporate
Amazon has seen a pandemic-fueled rally in tech stocks more than two years ago. As buyers reduced their expenses because of economic uncertainty, Amazon reported the slowest revenue growth for a holiday quarter in the company’s history last month. That for the first time, the company’s market value went below $1 trillion.
Amazon and Microsoft Corporation were neck-and-neck in the race to breaching the unwelcome milestone, with the Windows software making close behind after having lost $889 billion from a November 2021 peak. While technology and growth stocks have been punished and degraded throughout the year, fears of recession have further dampened sentiments in the sector. The top five US technology companies by revenue have seen nearly $4 trillion in market value evaporate and disappear this year.
"We are seeing signs all around that, again and again, people's budgets are really tight, high energy costs are an additional layer on top of that caused by other issues," Amazon CFO Brian Olsavsky said. "We have started preparing for what could be a slower growth period, like most companies."
Amazon CEO Andy Jassy said, “There is obviously a lot happening in the macroeconomic environment, and we will definitely balance our investments to be more streamlined without compromising our key long-term, strategic bets. What won’t change is our main focus on the customer experience, and we feel even more confident that we’re ready to deliver a great experience for our customers this holiday shopping season."
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 the third quarter 2021.
Summary-
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. It's not just Amazon that's bleeding money, but also the top five US tech companies by revenue have already lost nearly $4 trillion in market value so far this year, thanks to rising inflation and macroeconomic headwinds.
Now as we know that Amazon isn't the only company feeling the impact of a shaky economy and a return to life outside the home after the initial COVID-19 lockdowns. Microsoft's market value peaked at around $2.5 trillion and sat at $1.84 trillion. Meta, now known as Facebook, reached just over $1 trillion in value and sat at just under $300 billion.
Amazon CEO Andy Jassy recently launched a cost-cutting review for the company. That apparently includes suspending unprofitable projects and reassigning or recruiting new employees. Nevertheless, the global e-retail sector is bracing for a new wave of hurdles as inflation and market uncertainty threaten to hamper its growth.
Did You Know
Amazon was almost named "Cadabra," which is short for the magic term, "abracadabra."
BY:
Sakshi Chauhan
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