Breaking Down Amazon’s Recent Financial Success

By Aditya Gunna, Branding Manager

Amazon has been in the news almost every week for the past year. When Amazon opened in 1994, Jeff Bezos, CEO and founder of Amazon, had big plans to revolutionize online commerce. In the early 2000s Amazon acquired many smaller online retail companies like Zappos and Audible.com. As of today, most people consider Amazon as the biggest online commerce market in the entire world, but Bezos has some rather interesting ideas for next path of his company.

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In late August this year, Amazon acquired Whole Foods Market. This acquisition costed Amazon nearly $13.7 billion dollars. This may seem like a bad move just due to the large price for the purchase, but after there was talk of a Whole Foods Market purchase the stock of Amazon grew over $30. That means the Amazon’s market cap grew to over 15.5 billion due to the Whole Foods Market purchase. So at the end of the day, Amazon got Whole Foods Market for practically free and pocketed an extra 1.8 billion. This trade made Amazon catch the attention of all types of analysts all over the world.

“Over the longer term, I do see Amazon is going to be more competitive in this world,” Joe Feldman, analyst at Telsey Advisory, said on CNBC’s “Power Lunch”.

stockAmazon’s stock value in the past 12 months. Notice the spike in late July, around the time when whole foods was bought.

Amazon has also been focusing on other industries; last year Amazon Studios was part of one of the best movies of the year. Manchester by the Sea was nominated for 6 Oscars including “Best Picture”. After it was premiered in early 2016, Amazon Studios bought the movie for distribution. Amazon Studios payed 10 million for the distribution rights which was the second highest purchase price for distribution. Through this movie opportunity Amazon Studios gained a respected and powerful name for itself, while also gaining money.

If Amazon continues on the same trend for the next years, then they will become one of the most powerful and richest companies in the world. I can’t wait to see what industry and path they take next, and what amazing things they will achieve.

Photo from: https://www.recode.net/2017/9/7/16266142/new-amazon-headquarters-rfp-north-america

 

 

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