Amazon’s (AMZN) earnings sparked a sharp sell-off in after-hours trading tonight. It reported a net loss of $126 million - that’s 27 cents per share in the second quarter compared to a 15 cent loss a year ago. Wall Street was estimating a 15 cent loss this quarter and that surprise is burying the stock tonight--it’s down over 10%. On the other hand, Amazon reported a 23 percent increase in revenue to $19.34 billion, which came in line with analysts expectations.
Amazon’s strategy to invest heavily in long-term growth while obliterating its competition by sacrificing margins has always worried investors, who are responding tonight. Founder and CEO Jeff Bezos’s model has famously been “Get Big Fast” and Amazon is huge. But investors also like the phrase “Get Rich Quick.” And Bezos’s behemoth is trying some stockholders’ patience. Investors eventually want to see some profit on their investments, even if Amazon is willing to wait.
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