NEW YORK (AFP) – After posting widening losses, Amazon took a pounding on Wall Street Friday, raising doubts on whether investors will support chief executive Jeff Bezos’ strategy of putting investment ahead of profit.
The shares tumbled 8.3 per cent to close the week at $287.06, having slid some 28 per cent from highs earlier this year.
Amazon said Thursday its loss in the last quarter widened to $437 million after a series of product launches including new phones, tablets and television programs.
The news from online retail giant, which is known keeping profit margins low as it grabs market share nonetheless stunned many investors and analysts.
“Frustration with Amazon is reaching peak levels,” said Deutsche Bank analyst Ross Sandler. “We are struggling to identify a catalyst to break the negative momentum.”
The loss in the third quarter was worse than anticipated, and far worse than the $41 million deficit in the same period a year earlier.
The loss came even as net sales increased 20 per cent from a year ago to $20.58 billion in the quarter.
“We see further downside risk to the stock,” said Barclays analyst Paul Vogel.
Vogel said Amazon’s aggressive spending and soft growth outlook “may be too much for everyone but the most patient of investors”.
Shilpa Rosenberry, analyst at the research firm Daymon Worldwide, said Amazon is facing challenges at it tries to expand globally and goes up against new challengers like China’s Ali Baba.