In an environment of falling values of stocks in the tech and growth sectors and economy-wide fears of a recession, Amazon has reportedly become the first public company whose market cap has dropped by $1 trillion.
Between its record close at a market value of $1.88 trillion in July 2021 and its market cap of $879 billion on Wednesday (Nov. 9), Amazon’s value has fallen by that landmark figure, Bloomberg reported Wednesday (Nov. 9).
Inflation, higher interest rates, a post-pandemic slowdown in eCommerce growth and the company’s own earnings updates have delivered unwelcome news that led to selloffs of Amazon stock — contributing to a 4.3% drop in the price of the company’s shares Wednesday, for example — according to the report.
Amazon did not respond to PYMNTS email asking for a comment.
The eCommerce giant is not alone is seeing its market value drop; the five highest-revenue U.S. tech companies have lost a combined $4 trillion in market value this year, according to Bloomberg.
In its most recent earnings release, issued Oct. 27, Amazon reported that its top line grew a respectable — albeit below estimates — 15% during the quarter ended Sept. 30.
However, as PYMNTS reported Oct. 28, strong dollar foreign exchange headwinds and rising expenses simply devoured most of its profits, leaving the company with razor thin margins and very little to show for 90 days’ work.
The announcement pushed Amazon’s already battered stock price even lower, touching levels not seen since the COVID-19 lows in March 2020.
The company also lowered its forecast for the current quarter and said it expected that the challenging global economic environment and foreign exchange headwinds would continue.
The news did not sit well with investors, who had already seen the tech giant’s stock drop more than 40% in a year and its market value slip below $1 trillion.
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