The market value of Amazon recently decreased by $1 trillion. The eCommerce giant became the first publicly traded company in history to record such a huge loss as a result.
To put that in perspective, it would be like losing market value equal to Google's parent company Alphabet's net worth. It is currently worth about $1.13 trillion.
On Wednesday, the largest eCommerce company in the world reported a 4.3% drop to $86.14. Its shares consequently lost over 48% of its value in 2022 alone.
Amazon's market value was $1.9 trillion in July 2021. It is now down to almost $879 billion.
Andy Jassy, the CEO of Amazon, responded by implementing cost-cutting initiatives for the corporation. These consist of reassigning workers and stopping or finishing unproductive projects.
The company will also examine its technological items, such as the Alexa smart speakers. Additionally, Reuters was given an explanation by Amazon CFO Brian Olsavsky of the causes of the company's market value decline.
“We are seeing signs all around that, again, people’s budgets are tight, inflation is still high, energy costs are an additional layer on top of that caused by other issues.”
“We are preparing for what could be a slower growth period, like most companies. the chief financial officer continued.
Not just Amazon's market value is suffering at the moment. The market value of the top five US IT companies by revenue fell by $4 trillion in 2022.
At the time of writing, Microsoft's market value had decreased from $2.5 trillion to around $1.78 trillion. In August 2021, Meta's market value exceeded $1 trillion.
It currently stands at about $285 billion. Additionally, Twitter's CEO Elon Musk eliminated remote employment owing to declining ad revenue.
On October 28, 2022, the Center for Financial Research and Analysis (CFRA) Research maintained its "Buy" recommendation on Amazon stock.