Amazon’s shares plummet 10% as company reports first loss in 6 years

Amazon’s Shares Plummet 10% as Company Reports First Loss in 6 Years

Amazon, the world’s largest online retailer, has reported its first loss in six years, causing its shares to plummet by 10%. The company’s net loss for the second quarter of 2020 was $634 million, compared to a profit of $2.6 billion in the same period last year.

The loss was largely due to the company’s decision to invest heavily in its infrastructure and logistics network to meet the increased demand for online shopping during the COVID-19 pandemic. Amazon has been hiring thousands of new employees and building new warehouses and fulfillment centers to keep up with the surge in orders.

Despite the loss, Amazon’s revenue for the quarter was up 40% to $88.9 billion, beating analysts’ expectations. The company’s cloud computing division, Amazon Web Services, also saw strong growth, with revenue up 29% to $10.8 billion.

However, investors were disappointed by the loss and concerned about the company’s future profitability. Amazon’s shares fell by 10% in after-hours trading following the earnings report.

The company’s CEO, Jeff Bezos, acknowledged the challenges of the current environment in a statement accompanying the earnings report. “As expected, we spent over $4 billion on incremental COVID-19-related costs in the quarter to help keep employees safe and deliver products to customers in this time of high demand,” he said.

Bezos also highlighted the company’s efforts to support small businesses during the pandemic, including a $100 million investment in small business owners selling on Amazon.

Despite the setback, Amazon remains one of the most valuable companies in the world, with a market capitalization of over $1.5 trillion. The company’s dominance in e-commerce and cloud computing is unlikely to be challenged anytime soon, and its long-term growth prospects remain strong.

However, the company’s latest earnings report serves as a reminder that even the most successful companies are not immune to the challenges of a rapidly changing business environment. As the COVID-19 pandemic continues to reshape the global economy, companies will need to be agile and adaptable to survive and thrive in the years ahead.