Amazon’s investors were met with a tremendous shock when it was revealed that Amazon had completely missed its financial targets, with the value of its shares, initially estimated at 1.42 cents falling to a mere .42 cents. This was an enormous blow to the internet retail giant which had made key investments and raised spending in the past few months.
Whole Foods acquisition
Amazon's most recent big purchase was the acquisition of Whole Foods for $14 million. Amazon is trying to turn the grocery shopping industry on its head by offering new technology services attached to the conventional grocery store experience such as same-day delivery of goods to Amazon Prime subscribers.
Most importantly it is trying to edge out its other big competitor in retail, Walmart. Walmart makes up 14.5 percent of the U.S. grocery food market, according to GlobalData Retail, while Amazon makes up just 0.2 percent. However, when it comes to market capitalization, Amazon is the true behemoth, as it is valued roughly $400 billion, compared to Walmart’s $200 billion.
Amazon moves into healthcare
Another grand, albeit low-key, investment that Amazon is pouring money into is health care and insurance. It is rolling out a new project, calling it 1492, after the year Christopher Columbus discovered the Americas. Amazon has also offered new jobs to UI developers etc to work on “a1.492”. Although it not interested in developing any new health materials, according to CNBC, it is seeking to revolutionize the distribution of health care services.
This could be especially relevant at a time when the health care industry is being rocked by turbulent decisions in the Senate concerning the future of the Affordable Care Act, popularly known as Obamacare. If Amazon’s gambit is successful then it would surely be able to outpace other tech industry competitors like Google.
Jeff Bezos, richest man in the world?
Amazon’s disappointing stock market news came just hours after its leader, Jeff Bezos was found to have surpassed Bill Gates in value as the richest man in the world. After the release of information, his title may now be in jeopardy.
While his title may be hanging in the balance, Amazon’s future is surely not.
Investors understand that Amazon is keen on increasing its market share. It is willing and able to do so, because of its vast amount of resources.Victor Anthony, an analyst at Aegis Capital Corp emphasized that investors will “eventually give Amazon a pass because it invests in growth opportunities.”
