Amazon Lost 1 Trillion in Market Value, How and Why?

For those who are uninformed, Amazon Inc is a multinational technology company that provides online retail shopping services.

Now, Amazon has become world famous company. However, the same was not the case. Amazon was first established in Jeff Bezos’ rented garage in Bellevue, Washington.

During the start-up, Jeff’s parents had invested $250k in the beginning. Now, the company has a market value of several billion.

In the start, Bezos created a list of 20 products that could be marketed online and started working on that. Eventually, he narrowed the list to the five most profitable products.

Those five products include compact discs, computer hardware, software, videos, and books. After the algorithm, Bezos finally decided to sell books via Amazon.

In this way, Bezos created one of the most valuable companies in the world out of nowhere. In the beginning, Amazon sold books online, and it sells every product available online.

amzon 1 trillion loss — **Graph representing Amazon’s loss of $1 Trillion**
**Source: Bloomberg**

During the first two months of its establishment, Amazon sold books in all 50 states and over 45 countries. So the company got to business from its start It was not easy for Jeff to run the company in the beginning due to the uncertainty of the online business.

Eventually, after two months of establishment Amazon’s sales scaled up to $20,000 per week. The company then issued its initial public offering of capital stock on 15th May 1997.

Amazon’s shares at the time were $18 per share, which was traded under the NASDAQ stock exchange symbol of AMZN.

How Amazon Lost 1 Trillion in Market Value?

Amazon is one of the fastest-growing companies in today’s world. Its founder Jeff Bezos was once the wealthiest man on the planet.

However, the same is not the case with Amazon. After the rise comes to a decline, and the reduction of Amazon can be seen these days.

As per recent reports, Amazon has lost $1 trillion in market value due to inflation, strict monetary policies, etc.

Amazon had a market value of $1.88 trillion on July 2021. However, now the value has declined to $879 billion.

This all happened due to the fall in share value. For example, this Wednesday, Amazon experienced a 4.3% fall in the value of its shares.

Furthermore, the company had its slowest revenue growth for the holiday quarter. This incident pushed Amazon’s market value below $1 trillion for the first time.

This decline in the market value of Amazon has vastly affected the total net worth of Jeff Bezos himself.

At the beginning of 2022, Bezos’ net worth was $192.5 billion. However, after the downfall, he currently has a net worth of $113 billion, making him the fourth wealthiest man on the planet.

Amazon is currently the world’s largest online retailer, which is presently coping with the problem of a sharp slowdown in e-commerce growth.

Amazon’s shares also have fallen almost 50%, resulting in a slowdown of sales, a jump in interest rates, and soaring costs.

While technology and growth companies have been battered this year, predictions of a recession have added to the sector’s gloom.

This year, the world’s largest online retailer has spent adjusting to a dramatic slowdown in e-commerce growth as buyers reverted to pre-pandemic behaviors.

Amazon forecasted the worst Christmas quarter sales increase in the company’s history last month, as buyers cut back on buying in the face of economic uncertainty.

Likewise, some other geopolitical issues of Russia Ukraine war have affected Amazon.com Inc in the long run. Moreover, the world is about to experience recession one more time which also affected the company’s financial situation.