By Jamie Barrie T here were doubters in their early years as a struggling online business called Amazon was trying to make a go of it. With many saying that Amazon would never reach the level of retail sales success that big box stores, like Wal-Mart enjoyed. What those naysayers forgot to watch was the stock prices for the companies they were comparing.
That type of support buys significant freedom for growing the company. It’s allowed the retailer to ramp up sales 20% and use cash to invest in brand new business areas like Amazon Web Services which is already estimated to be worth $160 billion and pumping out software like theAlexa voice product for speech based computing. So, what is next for this up and coming power retailer? Some say a make or break move. Amazon is going to tackle store front retail. Many think it’s a mistake because no company has been successful at switching from one to the other. Wal-Mart has struggled for years to build an online presence. Many think Amazon will also struggle in the bricks and mortar world. Time will tell but one thing is for certain, Amazon has the backing of Wall Street and with that the capital to make this work.
Wal-Mart has long been of blue chip stock. It’s a great run company with years of success.
Almost 23 years ago, Amazon began to climb up the value chart towards its bricks and mortar challenger Walmart. It took the online retailer 18 years to finally catch Walmart in market value. Sound impressive? Since reaching that milestone Amazon has continued to soar. It has only taken them two more years to double their value compared to Wal-Mart. Amazon has a market capital net worth of $459 billion USD compared to Walmart’s $228 billion USD. However, don’t sell those Walmart shares yet. The company has three times Amazon’s annual revenue and about five times their net income. What is driving their stock price up? Well according to Amazon’s CEO, Jeff Bezos he credits their market value towards the story they have told Wall Street about future revenue targets and net income levels. It would appear investors have bought in and they are hoping for a very happy ending.
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SPOTLIGHT ON BUSINESS MAGAZINE • MAY 2017
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