In just over a year, Amazon has lost more than half of its market valuation. Microsoft is also in a complicated situation
Amazon has become the first publicly traded company in the world to see its valuation fall by $1 trillion. Even more impressive, this fall occurred in an extremely short period of time: less than 18 months.
The stock market panics, Amazon pays the price
Amazon is now valued at $879 billion, a far cry from the $1,880 billion it was worth in July 2021. The company had largely taken advantage of the health crisis to do well in 2020 and 2021, but is going through a much more troubled period right now.
Amazon is experiencing a sharp slowdown in e-commerce growth as consumers return to pre-pandemic habits. In addition, inflation is weakening demand, while the costs of storing, packaging and transporting products increase, hence the new price of the Amazon Prime subscription. Rising interest rates also do not bode well for a strong recovery in economic activity in the short term.
All these elements have led to investor mistrust, and to the fact that Amazon has fallen on the stock market in recent months. According BloombergJeff Bezos would have lost at least 83 billion dollars since the beginning of the year 2022.
Microsoft is also in the red
Amazon is already planning to have a difficult last quarter of the year, whereas this one is normally conducive to record figures with the end of year celebrations.
Amazon is far from the only one to suffer from the current situation. The Top 5 largest US tech groups by revenue would have lost $4 trillion in valuation in 2022.
Besides Amazon, Microsoft suffered the biggest loss. The Windows publisher has lost 889 billion dollars compared to its historic peak achieved in November 2021. And the fear of a potential recession should not help matters.
Source : The Economic Times
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