From CNET: Investors could finally be losing their patience with Amazon.
Amazon's stock tumbled 11 percent in early trading Friday to about $318 a share, after the company reported a wider-than-expected second-quarter loss. As of Thursday's close, the stock was already down 10 percent so far this year.
The online retailer has enjoyed an incredible run-up in its stock for years, even as it has spent heavily to fuel rapid growth, eschewing profits along the way. In past quarters, investors cheered strong revenue growth despite tiny profits or even losses.
Amazon's stock now is experiencing a sell-off after the company came out with a second-quarter loss of $126 million on Thursday. An even bigger operating loss, as much as $810 million, is predicted for the current quarter.
To quickly grow, Amazon has taken the money it may have booked as profits and instead spent it on more warehouses, employees, and technology, while also undercutting prices of some competitors. Common investor wisdom has stated for years that Amazon's high-spending, low-pricing model would force competitors out of the market, allowing the online retailer to eventually raise prices, cut back on spending, and start posting strong profits. That scenario still hasn't played out.
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