Sunday, November 13, 2016

Amazon Is Right To Be Worried After Trump Got Elected

Bezo and Amazon
It was pretty known that President-elect Donald Trump has no love for's CEO Jeff Bezos, who also owns the Washington Post, a newspaper that aggressively investigated the candidate during a no-holds barred campaign.

He also once said that Amazon, which dominates e-commerce, has a "huge antitrust problem," given that the company "is controlling so much of what they’re doing."

So what are the prospects for America’s fifth largest company by market value under an administration led by the Republican firebrand?

Bezos built an empire based, in part, on Internet sales of goodies that stem from the overseas factories that Trump has said have stolen American jobs.

Free trade fills the company’s sails — as it builds a planetary network of warehouses, transportation and profitable data centers that are turning it into a truly global store. At the end of 2015, more than a third of Amazon’s physical footprint was in countries other than the U.S., and about 32 percent of its retail sales were made overseas. Trump has also railed against the trade deals that facilitate some of that commerce, saying they’re not advantageous enough to the U.S.

Investors seemed to sniff some danger: Amazon shares fell US$ 15.87, or 2 percent, to US$ 771.88 9 November, even as the wider stock market shrugged off initial fears about a Trump presidency.

A hostile environment in its U.S. home base would add to some of the policy issues it has run into overseas, including antitrust and tax investigations in Europe.

Colin Sebastian, an analyst with Baird, said it’s unlikely a U.S. administration could build an antitrust case against Amazon, which remains small in terms of global retail. "They’re not a majority player," he said.

As for the potential impact of higher tariffs, "that would affect a lot of companies, including major competitors that offer less selection than Amazon, and are therefore more vulnerable," Sebastian said.

However, it is early to tell at this time. President Trump will take office January next year, by the first month, everyone will know how he will put Amazon in its proper place.

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