Though news of Amazon.com's stock slump is all over the business press, most analysts remain sanguine about the company despite its red ink. As the New York Times reported, the company announced a 157 percent sales increase to $650 billion in its fourth quarter yesterday, but that wasn't enough for many investors, especially since the company also reported increasing losses. Investors responded by driving the stock down nearly 14 percent.
Nevertheless, the spin was largely positive for the world's largest electronic retailer. The New York Times' Saul Hansell wrote that Amazon "continues to solidify itself not only as the biggest online store but as one of the country's biggest mail-order retailers." Hansell quoted Jamie Kiggen, an analyst with Donaldson Lufkin & Jenrette: "The case against Amazon reminds me of the case against America Online a few years ago. Everyone said they were spending too much money, but once they got to a certain size, it didn't matter."
Wired News ran a gloomy headline, "Amazon a River of Red Ink," but its story ended on an upbeat note: "Still, the [$650 million sales] figure itself is heartening. In 1998, Amazon.com did $610 million in sales for the entire year."
CBS MarketWatch ignored the stock slide in its headline, "Amazon sales exceed $650 million." The Washington Post also put the good news up front, reporting, "During the holiday season, more than 2.5 million new customers shopped with Amazon for the first time and the company shipped roughly 20 million items." A company that just saw $4 billion knocked off its valuation couldn't ask for friendlier coverage.