Amazon is down since woes for Bezos began, but analysts say not to worry

Amazon CEO Jeff Bezos stunned everyone with his revealing post accusing National Enquirer of extortion and blackmail, but analysts covering the biggest online retailer don’t really care and believe the swirling controversies won’t affect his ability to lead the Internet retailing and cloud software juggernaut.

Bezos, Amazon’s single largest shareholder and the world’s richest man, revealed in a personal online post Thursday night that the Enquirer allegedly tried to blackmail him, showing emails threatening to publish nude selfies and details of his extramarital affair.

“At the end of the day, we get back to the fundamentals of the company, irrespective of what executives are doing,” said Ron Josey, internet analyst at JMP Securities. “I would be surprised if it had a negative impact on Amazon. It’s such a large business with a lot of different opportunities and operation. The way it’s set up with leadership across retail and AWS and the businesses underneath with logistics and advertising… there’s a lot of support here.”

“I don’t think the allegations have a direct line into the fundamentals of Amazon,” added Anthony DiClemente, internet analyst at Evercore ISI. “Certainly from a public relations standpoint, I don’t think it’s ideal. When you look at the fundamentals, it’s hard to imagine it will have a negative impact.”

The personal woes for Bezos began when he announced the plans to divorce his wife of 25 years on Jan.9, leaving the whole industry speculating how it could impact Amazon shareholders and Bezos own 16 percent stake. Later the online retailer on Jan. 31 reported mixed fourth-quarter earnings and issued weak guidance.

Amazon stock has dropped nearly 5 percent since the day before the divorce announcement through Friday, bringing its market cap down to about $793 billion. The online retail giant has underperformed the broader market, the consumer discretionary sector and the technology sector as much as 12 percent during this period. The divorce news possibly could be part of the driver, but the real reason for the underperformance is more likely the company’s warning of increased spending and slowing growth in 2019 during the earnings call last week.

The stock dropped another 2.5 percent on Friday.

CNBC’s Jim Cramer was bluntly warning investors against acting rashly towards Amazon stock, in the wake of the saga, saying “if you’re selling Amazon off this, you’re really stupid.”

When asked about Bezos’ post, RBC’s internet analyst Mark Mahaney had similar sentiments, saying “I did read it. No dramatic reaction.”

'Prioritize protecting my time'

Bezos retained his longtime security chief Gavin de Becker to lead the investigation into Enquirer’s practice. In the online post, Bezos did make efforts to acknowledge his giant businesses that required his time and devotion, and he does not want to stray too far away from them.

“I asked him to prioritize protecting my time since I have other things I prefer to work on and to proceed with whatever budget he needed to pursue the facts in this matter,” Bezos wrote.

Enquirer’s parent company American Media insisted on Friday that it “acted lawfully” in reporting about Bezos’ extramarital affair, but said it will “promptly and thoroughly investigate the claims.”

“He seems to be the type of individual who’s able to navigate challenges. I don’t think this is going to have a negative impact on how he runs the company or his influence within Amazon,” said Tom Forte, consumer technology analyst at DA Davidson. “This isn’t a situation like Facebook where there’s a super voting share class. He does not have voting control. I would argue his influence within Amazon is a reflection of his vision and his track record.”

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