Amazon's value drops £45bn despite record Christmas sales
Amazon’s stock market valuation dropped by £45bn on Thursday evening after the company’s sales forecasts disappointed Wall Street.
Shares in the e-commerce giant fell 5.4 per cent in after-hours trading despite a strong Christmas that helped it deliver record profits of $3bn (£2.2bn) for the quarter. Revenues beat expectations, rising by a fifth to $72.4bn but the shares were hurt by a weakened sales outlook.
Amazon said current-quarter revenues will be hit by uncertainty about the impact of new e-commerce rules in India, an important growth market.
Regulations that came into force on Friday forced Amazon to withdraw a host of items from its India website, including Echo speakers, batteries and floor cleaners.
The laws ban retailers from selling products via vendors in which they have an equity interest and also from making deals with sellers to sell exclusively on their platforms.
With a population approaching 1.4 billion and a rapidly expanding economy, India is seen as a key market for Amazon and a number of other online retailers.
Amazon also said its costs may increase this year, as it spends on hiring, warehouse construction and other investments.
Outside of the e-commerce business, Amazon performed strongly with a record number of people signing up to its Prime video streaming service.
Amazon Web Services, which provides cloud computing, grew 45 per cent in the quarter while “other” revenue almost doubled from a year ago.
Selling adverts to companies that want their products to show up first when shoppers search for things on the site is also now big business for Amazon, though it did not reveal how much money this brings in.
Amazon said that its voice-activated device, the Echo Dot, which features the Alexa digital assistant, was its best-selling product.
“Alexa was very busy during her holiday season,” said chief executive and founder Jeff Bezos, in a statement.
Prior to the latest fall in Amazon’s share price, Mr Bezos’s personal wealth was put at $142bn by the Bloomberg Billionaire’s Index; almost $50bn more than the world’s second richest man, Bill Gates.
