News from Bloomberg: (paragraph four)
Scott
Seattle, May 3 (Bloomberg) -- Amazon.com Inc. shares fell 12 percent on concern that the largest Internet retailer's plans for increased spending on promotions and new services will prolong losses.
Amazon.com fell 21 1/8 to 150 15/16 in trading of 13.1 million shares, more than its three-month daily average of 8.1 million.
Chairman Jeffrey Bezos said last week that he plans to increase spending to expand the business, resulting in losses 2.5 times larger than the first quarter. The stock has fallen 28 percent from its peak of 210 1/8 two weeks ago, wiping out $9.53 billion in market value. ''The reality is continuing to sink in,'' said analyst Sara Zeilstra of Warburg Dillon Read, who rates Amazon.com ''hold.'' ''It takes a lot of money and assets to build an e-commerce company.''
The shares may also be hurt by speculation that CDNow Inc., Amazon.com's main online music rival, may be bought by a larger company looking to expand online, analysts said.
Possible buyers for CDNow include Germany's Bertelsmann AG - - which already owns a 50 percent stake in online book retailer barnesandnoble.com -- and Time Warner Inc., said analyst Scott Appleby of ABN Amro, who rates Amazon.com a ''hold.'' CDNow declined to comment, citing a company policy not to comment on market speculation. |
