We’ve seen Tesla Motors Inc (NASDAQ:TSLA) stock jump almost 5%, due to Elon Musk’s intriguing announcement on Twitter, fact which proves the power of expectations in economics. Amazon.com, Inc. (NASDAQ:AMZN) will have to pass the same test, but on the darker side. According to CNBC, the company’s current price of $303.64 could drop to $250 even, if investors lose patience while expecting some kind of profitability.
“This is the triangle of death right here. If you ever break below this $300 on big volume on fundamental news, it could be lights out. You could see $250, something like we saw in Netflix,” uttered Dan Nathan.
Amazon.com, Inc. (NASDAQ:AMZN) is far from actually being doomed, but if financial reports do not portray growth possibilities or cash influxes then markets might conclude that there’s something fundamentally wrong with the e-commerce giant. Taking into consideration the last financial disclosures offered by the company, punishment has begun to be administered to Amazon.com, Inc. (NASDAQ:AMZN) upon the unsatisfactory news.
“Over the last 4 quarters the stock has actually moved on average 10% and when you go here and you look at the year to day chart, you can see these huge gaps on these earnings misses here. So, when you think about it, it is suggesting that investors are no longer happy with this happy not demonstrating their ability to earn cash,” said Dan Nathan.
Obviously, there’s still lot of bullish potential in Amazon.com, Inc. (NASDAQ:AMZN)’s stock as the business pursued an expansionary growth strategy that allowed to expand quickly throughout the market at the expense of current profits. The Options Action traders have some $315 January puts and suggest that taking some money off the table is perfectly reasonable, however they are still looking forward to the stock rising in price.
Amazon.com, Inc. (NASDAQ:AMZN) should rebound anytime soon, or at least give the impression that is going to do so, because the 24% underperformance so far for 2014 doesn’t look very promising for the company’s future.
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