Amazon's Market Value Evaporated $ 13 Billion

As Amazon continues to strengthen efforts to challenge Apple

, the company's expected profit of the quarter decreased. Due to lack of confidence, many investors have withdrawn capital, leading Amazon's market value evaporated $ 13 billion.

Amazon said yesterday that, due to rising costs, the company's fourth-quarter operating profit is negative $ 200 million. The company's stock plunged 13 percent, which is the largest decline since October 2008.

Amazon is currently having a comprehensive competition with Apple in the Tablet PC, digital music, books and film sales and other markets. Amazon, in order to expand its market share in the Tablet PC market, even sells its latest Kindle Fire Tablet PC at the low price of $ 199. This product is half less than the price of Apple's cheapest iPad. According to the market research, Amazon sold the product at such a low price and every sale of a product will bring to the company about $ 10 of loss.

The analys said that it is not an easy task to compete with Apple. Amazon needs to pay a not small price. If Amazon's own traditional media business does not transform to digital busines, then it will eventually be forgotten by the world." In the last quarter, the company's profitability also surprised many analysts, because the actual value is 42 percent lower than expected. It is the biggest negative news of S & P 500 index in the technology sector.

Amazon's stock price this year has increased 26%. This month it has risen to the highest $ 246.71. However, the stock price volatility makes Amazon's pressures to achieve strong performance are increasing. Amazon's CFO said Amazon has 17 new orders this year, centers. The cost of expenditure reduced the profit margins. Meanwhile, the company is still building infrastructure for its network services. He said, "In order to adapt themselves to the rapid growth, we have added many new facilities.

In addition to Amazon is competing with Apple in many markets including digital music, digital movies, etc, the company also is competing with Spotify which provides streaming music service and other start-ups. The analysts pointed out that even if Amazon's sales rise, Amazon's current growth plan is still not sufficient to stimulate profits to increase. If Amazon does not show the corresponding profit growth, investors will lose patience.

The analysts said that Amazon hopes to boost sales through low-cost equipment. He pointed out that "even if the operating profit margin is only 1% or 2%, Amazon does not care.

by: Amanda Xia

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