The Tribune

By CHRIS ILLING

Chief operating officer

ActivTrades

EVEN the most powerful online retailer in the world is having trouble with the gloomy consumer mood. After disappointing quarterly figures, Amazon’s share price collapsed dramatically. This also affected the fortune of its founder. And some of the world’s other richest men are still feeling the effects of this technology crash.

On Thursday evening, after the US stock markets had closed, the US group Amazon presented its business figures for the past quarter. They were so devastating that many investors wanted to get rid of their shares after the trading day’s close. The course collapsed, at times by more than 20 percent. Within a very short time, the company’s valuation fell by an unprecedented $230 bn.

With the crash, the fortune of founder and chairman, Jeff Bezos, also fell last week by approximately $20 bn.

The Amazon shock took investors by surprise. The group earned only $2.9bn in the third quarter, and thus a good 9 percent less than in the previous year. Amazon’s operating profit had even halved, and came largely from the cloud service AWS, which was also weakening. Although sales grew by 15 percent to $127.1bn, they also remained below market expectations.

And the forecast for the important Christmas quarter was viewed by investors as a disappointment. Andy Jessy, Amazon’s chief executive, expects revenues of between $140bn and $148bn, and profits of between zero and $4bn in the final quarter, as he announced on Thursday after the stock market closed. That corresponds to meagre growth by Amazon’s standards of between 2 and 8 percent compared to the same period last year. Analysts had also expected significantly more here.

The courses fell correspondingly drastically. And the crash in tech stocks is also squeezing the fortunes of the other super-rich. This is particularly noticeable among the technology kings, who had established themselves at the top of the global money elite during the boom in share prices.

Meta boss, Mark Zuckerberg, was hit particularly hard. Just over a year ago, with around $140bn, he was still well ahead of the global elite. After the disappointing figures from Facebook, and the share price slump last week, Bloomberg only ranks him 28th with just $38bn - a $100bn slump in just over 13 months. Mark Zuckerberg’s quarterly figures started the tremor on the stock market. Meta’s decline in sales has accelerated, while at the same time the development of the Metaverse is swallowing up billions. The stock collapsed by 25 percent, wiping out $60bn.

Other super-rich from the technology scene also felt this. Google founders, Larry Page and Sergej Brin, lost $42bn and $41bn, respectively. The assets of Microsoft’s major shareholders, Bill Gates and Steve Ballmer, shrank by $29bn and $24bn. Chinese technology heroes, Alibaba founders and Tencent founders, Ma Huateng and Jack Ma, lost $22bn and $9bn, respectively.

The global list of billionaires continues to be led by Elon Musk, who has just bought Twitter. His fortune is currently estimated at $212bn, which is $125bn less than almost a year ago, when Tesla’s share price exploded briefly.

This reinforces the dichotomy in the market that, while technology stocks are penalised, shares of so-called quality companies that pay high dividends and have high cash flows are in demand. During the trading day on Friday, more shares were up than down in the market-wide S&P 500 index despite the sell-off in the technology sector. Shares in oil companies, energy suppliers and banks are currently in demand.