Although the company has had one of the most profitable years in its history during 2015, it seems like that trend is slowly dying off, as Amazon’s shares start off the new year with a decrease. The 6% decrease in share value may seem as relatively small, but odds are that they will not bounce back to their high levels in the next couple of weeks due to the current Chinese economy and the Middle Eastern market instability that has greatly impacted Wall Street.
Because of its 6% fall, Amazon has started to be downgraded by some analysts that were previously praising the company’s glory of 2015. Its share values reached the top spot in the market, with values ranging between $330 at the beginning of the year and a whopping $700 per share at the end of 2015. But Amazon was not the only one suffering from a downgrade after the market report of Monday, 4th of January. Facebook and Netflix shares have decreased as well, with investor confidence going down alongside them.
Either way, this does not in any way change the fact that Amazon went through an extremely beneficial year in 2015. More than 1 billion items were delivered globally, effectively expanding the company’s program entitled “ Fulfillment by Amazon”. Cyber Monday was one of the most profitable sale periods, with over 23 million items for third-party merchants being delivered on a worldwide scale.
Last year’s Cyber Monday sales increased in comparison to 2014 by a significant margin, in some cases even surpassing the 40% mark. This was also seen during Black Friday as well, and when the Christmas sale numbers will be disclosed, investors are also expecting them to be greater than 2014. But this phenomenon is not only due to Amazon’s business practices, with online shopping and e-commerce suffering from an increase in popularity on all sides of the market, leaving brick-and-mortar retailers and stores somewhat trailing behind.
Another reason why Amazon is suffering from a decrease could be the fact that the company is steadily increasing in size through innovations and massive purchases. The amount of funds invested in drone delivery systems and truck fleets is starting to take its toll on Amazon’s shares. But this will likely not stop the company from being 12 months ahead of its competitors in regards to technological advancements.
Even though the market analysts’ decision to exercise patience in regards to the company’s estimated share and total market values, the fact that Amazon’s shares start off the new year with a decrease still remains. If this plunge will continue in the following weeks of January, only time will tell, being entirely dependent on the state of the general market.