Amazon.com, Inc. (NASDAQ:AMZN) had a big sell off last week after the company’s second quarter earnings and forward guidance disappointed Wall Street. According to analysts, Amazon.com, Inc. (NASDAQ:AMZN)’s growth for its size is commendable, but the company has to start focusing on generating profits instead of just redeploying the money that it earns back into the business for growth.
CNBC’s ‘Fast Money’ trader, Dan Nathan, found an interesting co-relation between Amazon.com, Inc. (NASDAQ:AMZN)’s stock prices and the media appearances by its CEO, Jeff Bezos, which he discussed along with the company’s future strategies with CNBC’s presenters, Scott Wapner and Melissa Lee.
“[…] Going to think back to 1999, when Mr. Bezos was featured as Time’s Person of the Year. You know, the stock was near an all time high. You look at the chart, In the year since that cover, the stock was down 85%, that obviously corresponded a little bit with that thing called the Internet bubble bursting […] From that low in 2001-2002 the stock rose 1700% to 2007, right before the financial crisis. In the November of 2007 Bezos was once again featured on the cover of Newsweek, and he was redefining the book and there was a lot of excitement about the e-readers. Well, he did redefine that, but the stock declined 56% in the next year […],” Nathan said.
Nathan went to add that the stock had a 65% peak to trough decline after Bezos featured on the cover of 2007. He applied the same theory to Bezos appearance last year on CBS’s 60 minutes, since when the Amazon.com, Inc. (NASDAQ:AMZN)’s stock is down 20% and at one point of time in May was down nearly 30%. Nathan compared this co-relation with the ‘Sports Illustrated’ jinx theory, according to which a player or his team performs dismally after appearing on the magazine’s cover.
“If you are a company, would you rather be able to grow revenues 23% or worry about your bottom line, It could always, always squeeze in,” Wapner said.