Wall Street’s patience with Amazon’s losses wears thin

“Amazon.com Inc. shareholders have been extremely patient with the company’s investment strategy,” Therese Poletti reports for MarketWatch. “But after the Internet e-commerce giant reported a wide-than-expected second quarter loss last week, Wall Street’s patience began to fray.”

“Amazon reported weaker revenue in its cloud computing business, after it cut prices during the quarter. Many of the questions on its conference call with analysts revolved around Amazon Web Services, or AWS, and the growth slowdown. The price cuts were a response to growing competition in the cloud computing area,” Poletti reports. “Amazon’s high-flying shares fell more than 10% after its results and shed more ground in trading on Monday. Several brokerage firms have cut earnings estimates or lowered their ratings on the stock. ‘Investors are less patent than before regarding ongoing margin pressure,’ Canaccord Genuity analyst Michael Graham said in a note late last week.”

Jeff Bezos

“Indeed, some investors are starting to wonder if Amazon, by trying to be all things to everyone on the Internet, is starting to do too much. From its work on delivery drones to streaming video devices to its new smartphone, Amazon has its fingers in all kinds of pies,” Poletti reports. “Amazon shareholders will have to ask themselves whether Amazon is trying to do too much at their expense.”

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MacDailyNews Take: No mercy for the munchkin.

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