The Strategist

Rumors that Trump has a grudge against Amazon crushed the company's shares

03/29/2018 - 05:35

Quotes of Amazon fell more than 5% after media reported about the "obsession" of US President Donald Trump with an idea to increase the tax burden on the company.

Tony Webster via flickr
Tony Webster via flickr
The reason for the sharp decline in the shares of the world's largest Internet trading company in was a publication Axious magazine. The magazine, referring to anonymous sources allegedly close to Trump, told that the American president was negative towards Amazon.

The report includes the opinion of Trump, as well as US Vice President Pence on the dominant position of Amazon in the field of e-commerce, which they expressed in personal conversations.

In particular, it is noted that "Trump is obsessed with Amazon". He stated that he wants to change the current tax preferences for Amazon in the US. According to Axious, "Trump wondered about how to pin Amazon down with antitrust laws." According to sources of the publication, the administration of the American president is concerned that the expansion of Amazon's presence leads to bankruptcy of many other smaller companies.

As noted, "Trump's wealthy friends tell him that Amazon is destroying their business, killing shopping centers and small companies." In addition, Trump "takes into account that the founder and head of Amazon, Jeff Bezos, owns the Washington Post, viewing it as Bezos's political weapon."

At the end of December 2017, the US president already stated that he wants to raise taxes for Amazon.

Against the backdrop of new reports of his desire to "get to Bezos," Amazon shares plummeted at the opening of the trading session on the Nasdaq exchange on March 28, showing a fall of more than 5% during the first hours of trading.

Given the dynamics of Amazon shares, many experts noted that quotes entered the correction stage as the drop from the maximum levels shown on March 12, 2018 exceeds 10%.

The article of Axious is potentially a "wake-up call" not only for Amazon.

Vice President Michael Pence, according to sources of the publication, said that he was "worried" about the situation with Facebook and Google companies. He believes that the companies have become too influential in view of their influence on the coverage of events in the media, the share in advertising and the personal data of users, so these companies need "serious changes".