Amazon Stock Tanks After $885 Million Fine and Disappointing Earnings Are Revealed
Amazon stock plunged almost 7 percent Friday after the e-commerce giant disclosed an $885 million fine levied earlier this month.
The stock dropped to about $3,351 as of 10:30 a.m. Friday morning, losing about $130 billion of its $1.8 trillion closing value Thursday, according to Forbes.
Amazon’s second-quarter revenue of $113.1 billion is up 27 percent year over year, but fell short of analyst expectations of $115 billion.
Its net income of $7.7 billion also fell short of estimates of $7.8 billion.
“Consumers’ online shopping levels are returning to more normal levels as they shift some spending to other entertainment sources and offline shopping,” Morningstar analyst Dan Romanoff told Forbes.
“Meanwhile, the company continues to add capacity [and costs] at a breakneck pace in order to meet customer demand and one day delivery.”
The poor stock performance came as Amazon disclosed an $885 million fine levied by the Luxembourg National Commission for Data Protection on July 16.
The organization claimed Amazon’s personal data processing did not comply with European regulations.
A company spokesperson told Reuters that it will appeal the fine.
“Maintaining the security of our customers’ information and their trust are top priorities,” an Amazon spokesperson told CNBC.
“There has been no data breach, and no customer data has been exposed to any third party.”
The spokesperson added, “The decision relating to how we show customers relevant advertising relies on subjective and untested interpretations of European privacy law, and the proposed fine is entirely out of proportion with even that interpretation.”
The poor-performing stock and fine came as Amazon founder Jeff Bezos blasted into space last week.
Bezos stepped down as Amazon’s CEO earlier this month after 27 years with the e-commerce giant, NPR reported.
Bezos, the richest man on earth, left his position to pursue addressing climate change and exploring space.
Amazon thrived during the COVID-19 pandemic as quarantine led to many Americans shopping online.
However, some Amazon drivers and workers have alleged mistreatment and complained about working conditions.
This article appeared originally on The Western Journal.