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Jeff Bezos Loses $14 Billion as Amazon Stock Plunges

amazon ceo jeff bezos speaking at podium with company corporate logo
(Getty/David McNew)

By    |   Friday, 26 October 2018 01:30 PM

Amazon.com Inc. CEO Jeff Bezos lost as much as $14 billion in personal wealth as Amazon's stock plummeted 8 percent in early trading Friday, CNBC.com explained.

To be sure, Amazon shares (AMZN.O) dropped by the most in four years on Friday after its outlook for holiday season sales missed targets, fanning concerns that Wall Street’s tech darlings are finally starting to face stronger competition, Reuters reported.

Bezos' net worth was $138 billion on Wednesday, according to Bloomberg.

The plunge was a reaction to Amazon's third-quarter earnings report, which revealed disappointing revenue and guidance for the upcoming holiday season,

Amazon, the biggest online retailer, reported a second consecutive quarter of sales that fell short of estimates -- the first back-to-back revenue miss in almost four years. The company on Thursday also gave a disappointing revenue and profit forecast for the busy holiday period. Even its highly profitable cloud-computing business, Amazon Web Services, didn’t grow as fast as it had in the previous three months, Bloomberg reported.

The third-quarter results were the second time running that billionaire Bezos’ firm had fallen short of sales targets and, allied to a similar disappointment from Google-owner Alphabet (GOOGL.O), they sent a shockwave reverberating through stock markets.

There were no ratings downgrades from the Wall Street analysts who have almost universally backed the companies’ long-term prospects, but several said there were signs that both were beginning to face tougher competition from tech peers as well as the retail companies Amazon has bullied in recent years.

The 9-percent fall in shares knocked more than $80 billion off Amazon’s market value and relegated it behind Microsoft Corp. (MSFT.O) and Apple Inc. (AAPL.O) in terms of market value.

Now the Seattle-based firm has devoured retail players like Borders, Sears and Toys ‘R’ Us, it was facing bigger challenges from multinationals who are investing hard to compete, D.A. Davidson & Co analyst Thomas Forte said. “Google, Microsoft, and Walmart ... are more difficult to kill,” he told Reuters.

In a time of low interest rates, Amazon and Google have offered investors the chance to hitch a ride on the fast-growing e-commerce, digital advertising and cloud-computing markets buoyed by a steady global economy, Bloomberg explained. Amazon shares have roughly tripled in the past three years, while Alphabet is up more than 50 percent.

Now interest rates are rising, giving investors other options to generate returns, while clouding the outlook for the economy. Add in the recent stock market rout, and the tech companies had little room to bobble their results.

“Given the current market backdrop, your earnings report has to be perfect or your stock will get punished,” said Vic Anthony, an analyst at Aegis Capital Corp.

The environment is more worrying than a quarter or two of missed revenue numbers. After years of rapid growth, the share of Americans who go online, use social media or own mobile devices has plateaued in the past two years, according to a September analysis of Pew Research Center data.

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Amazon CEO Jeff Bezos reportedly lost as much as $14 billion in personal wealth as Amazon's stock plummeted 8 percent in early trading Friday.
jeff bezos, loses, 14 billion, amazon, stock
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2018-30-26
Friday, 26 October 2018 01:30 PM
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