As was discussed in one of our lectures on finance, a company’s performance is not always reflected by its stock value.
Despite the fact that Amazon’ has had a revenue growth of 44 per cent in the third quarter their share price has fell 17 per cent since the last quarterly result and 23 per cent down from the record high hit on Oct 17.
Amazon has also had a 26 per cent increase in active costumer accounts to 152 million. Which is the company’s fastest growth since 2003.
Amazon is also implementing a cloud computing serivce called Amazon Web Services which is expected to grow at about 40 per cent a year. Amazons Kindle Fire tablet is designed to also penetrate the market in the mobile device space and didgital content sector.
Although Amazon is thought to be selling the tablets at a it expects to make up for the loss in the sales of services through and movies.
Four years after introducing the first Kindle Amazon already sells more ebooks than paper books.
ECommerce is exploding and Amazon is one of the biggest ECommerce websites out there. Nevertheless the market is still skeptical. In my opinion the fact that Amazon is doing so well but is having such negative results on the stock markets exhibits the spectulative nature of many of those who trade in the market.