President Trump has made it clear since his election that he has gripes with Amazon.com over the e-commerce giant’s sales tax policies and its contract with the U.S. Postal Service for deliveries. And he hasn’t been shy about his disgust for the Washington Post, the newspaper owned separately by Amazon CEO Jeff Bezos.
But when a report Wednesday contended that Trump wants to “go after” Amazon, the company’s stock fell sharply in good part because investors are a lot more skittish these days about highflying technology stocks and any new obstacle that might hinder Amazon’s astonishing growth.
Before Wednesday’s drop, Amazon’s shares had soared more than 70% over the prior 12 months, a surge that more reflects Amazon’s future growth prospects than its current size and earnings ability.
So investors were ready to cash out at least some of those big gains when the news site Axios.com reported that Trump was “obsessed” with somehow further regulating Amazon’s business model.
“People are starting to get concerned about these valuations” for the shares of Amazon and other technology firms, said Jerry Braakman, chief investment officer of First American Trust in Santa Ana, which continues to hold shares of Amazon as part of the $1.1 billion of assets it manages.
Amazon’s stock closed at $1,431.42 a share, a drop of $65.63, or 4.4%, after being down more than 7% during the day. That lopped $31.8 billion off the Seattle-based company’s total stock market value, to $693 billion.
Wall Street “is now fearful that the long-awaited Trump vs. Amazon battle could finally be on the horizon,” Daniel Ives, head of technology research at GBH Insights, said in a note to clients Wednesday.
Amazon declined to comment.
Amazon is one of the so-called FANG stocks that lead the technology sector: Facebook Inc., Amazon, Netflix Inc. and Google, now part of Alphabet Inc.