Trump Lobs Another Threat at Amazon, Driving Down Ecommerce Giant's Stock Again

Trump Lobs Another Threat at Amazon, Driving Down Ecommerce Giant's Stock Again

Shares in the online retail giant have plunged 11 percent since last week, when Axios reported that the president was "obsessed" with regulating the company. JPMorgan Chase & Co. restated a "buy" rating and set a $1,385.00 target price (up previously from $1,375.00) on shares of Amazon.com in a report on Wednesday, January 10th. Analysts say Trump could also try to prevent the Department of Defense from signing a lucrative contract with Amazon's Amazon Web Services platform as a way to go after the online retailer.

Following President Trump's victory, the former businessman allegedly spent more than $2,000 in 2017 on Amazon products.

The U.S. Postal Service (USPS) in November reported a decline in annual revenue, hurt by a drop in first-class and marketing mail, offset partly by an increase in package delivery.

Bank of America Merrill Lynch told its clients that funds had significantly larger stakes in Amazon (AMZN) and Netflix (NFLX) compared to benchmark market indexes at the end of last month.

Trump's tweets could "keep a lid on the stock short term, but long term there's no real change to our positive thesis", he said.

The Trump tweets continued over the weekend, with another on Monday. "Our regulator, the Postal Regulatory Commission (PRC), looks carefully at this question every year and has determined that they do".

Only, the more packages the Postal Service delivers for Amazon, the more money it loses.

In case of Revenue Estimates, 40 analysts have provided their consensus Average Revenue Estimates for Amazon.com, Inc.as 49.88 Billion.

USPS Chief Financial Officer, Joseph Corbett, writing in PostalReporter.com previous year, noted that the postal service is required by law to charge retailers at least enough to cover its delivery costs.

Amazon regularly uses the USPS to complete what's called the "last mile" of delivery, with letter carriers dropping off packages at some 150 million residences and businesses daily. The post office charges some of the world's lowest stamp prices.

"An argument, however, could be made that the USPS was losing billions before it expanded its service offerings for Amazon and would, still, likely lose billions if Amazon discontinued its use of the USPS tomorrow", Forte said.

Details of Amazon's payments to the USPS are not publicly known, but some Wall Street analysts have estimated it pays the postal service roughly half what it would to United Parcel Service Inc or FedEx Corp to deliver a package. "This investment resulted in more efficient processes as well as thousands of jobs and related economic benefits in local communities".

The president's tweet also assumes that Amazon would be forced to pay if the Postal Service increased its rates for packages. But Amazon has been setting up its own shipping operations in the USA and elsewhere in the world to minimize costs.

Although he expects good news when company's start to report earnings in two weeks, the market has been stifled as companies are unable to buy back their stock in the weeks leading up to when they report earnings.

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