Amazon Plunges 11% after Clocking its first loss in 7 years

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Amazon Plunges 11% after Clocking its first loss in 7 years
02 May 2022
6 min read

News Synopsis

After registering its first quarterly loss in seven years, Amazon plunges 11% on Friday. This eventually erased more than $160 billion from the company's market value. In the first quarter, Amazon clocked a loss of $3.84 billion down from a profit of $8.11 billion in the same period a year earlier. The bottom line was hit hard by a $7.6 billion decline in the value of its stake in electric-car manufacturer Rivian, whose shares have crashed almost 70% this year. Other than this, the E-commerce giant also reported its slowest-ever quarterly revenue growth, with an increase of 7.3% year-on-year to $116.44 billion. Amazon informed that its significant investments in warehouses and staff during the coronavirus pandemic were catching up with it, as uncertainty increased about consumer spending.

In a statement, the Chief Executive Officer of the company, Andy Jassy said, "Today, as we're no longer chasing physical or staffing capacity, our teams are squarely focused on improving productivity and cost efficiencies throughout our fulfillment network.”Additionally, Jassy stated there was a high level of uncertainty, with the conflict between Russia and Ukraine, inflation, and supply-chain disruptions likely to put pressure on the company in the second quarter.

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