It’s summer, Corona isn’t raging as fiercely as it was a few months ago. A lot of people are going back to shop, the stores are open, and all of that is reflected in the purses. There was a previously rare show on Friday. If you’ve looked at the top-and-flop list of the US Nasdaq 100 stock index, this time you found a name at the bottom of the list that has mostly been at the top of the chart in recent months: Amazon.
Is it just a temporary phenomenon due to stock market volatility, or the start of a trend reversal?
Amazon’s statement released after the U.S. stock market closed is pretty clear. Of course, this does not matter for the long-term development of the share price, and yet it is important: the internet company expects the boom in internet shopping to abate. This is the extraordinarily strong growth momentum of recent months. Experts undisputed that online commerce will remain at a high level, including in Germany. But the hype seems to be over for now. After Amazon’s announcement, the company’s stock price has at times collapsed by more than seven percent. An Amazon share was worth “only” a voucher of 2,800 euros.
Amazon’s sales growth had already declined more sharply in recent months than many analysts had expected. And it wasn’t just because of the stationery stores that were reopened. Market watchers also noted that the Prime Day discount battle this time around in June fell short of expectations.
Amazon also announced that people are unlikely to be spending as much money on its platform in the coming months as they were a year ago. Amazon “only” assumes an increase of around 16% over the same period a year earlier, which is objective and a lot compared to other companies. But by Amazon standards less than before – and that’s what matters on the stock market. Not a good start for the new boss of the company Andy Jassy, who took over the post of Amazon founder Jeff Bezos in early July, who prefers to go into other spheres with his New Shepard.
Because his earthly life’s work took on such enormous dimensions, the fall in Amazon stocks also pulled other online companies into a downward spiral.
In Germany, shares of online fashion retailer Zalando lost value, sometimes by more than four percent. The Westwing and Home24 furnishing platforms were also under pressure. However, the rashes were not significant.
It seemed similar internationally. Shares of online companies such as Alibaba, Jd.com, Shopify, Ebay and Mercado Libre were all in the red, even though the indices were up. Not all of them have been caught in the downward spiral just because of Amazon. Some also find it difficult to show the other facets of the waning internet boom. Facebook shares, for example, fell after the social media group reported that the growth of ads on the platform had slowed. Like Google or Apple, Facebook also benefited tremendously during the corona pandemic from the fact that advertisers wanted to reach people on the internet and increased their spending for it. Here, too, the trend could be broken.
Regardless of that, online business has established itself at a high level. It is not excluded that the boom will resume in the fall. Stock prices will tell.