Amazon Stock Could Drop 50% Without Strong Prime Day

By Douglas A. McIntyre Published Jun 30, 10:30AM EDT

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Amazon Stock Could Drop 50% Without Strong Prime Day — © Julie Clopper / Getty Images

In the past 52 weeks, Amazon shares have traded as high as $188.65. The current price is near $107. Amazon Prime Day, always a massive spike in revenue for the e-commerce company, is slated for July 12 and 13. If there is any sign of how Amazon’s business is performing, it is Prime Day.
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Poor Prime Day results could push Amazon’s shares well below $100, which means they could fall 50% from their 52-week high. While that seems extraordinary, given the company’s earnings strength late last year, it is entirely within the realm of the possible.
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Amazon faces two hurdles. The first is competition. Walmart and other large brick-and-mortar retailers have begun to have success online. Amazon, as the market share leader, is the target of every one of these companies.
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The other hurdle is the headwinds of a recession. This is a sinking tide that will lower all boats. Amazon, despite its wild success for over two decades, is not immune. Its shares were battered along with most of the market in late 2008 and 2009 in a recession-driven market sell-off.
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Amazon’s future is bright, no matter how difficult the current results are. Prime Day could slice more off its share price. However, much of the company’s value (if not most of it) has moved to its Amazon Web Services business, the largest provider of cloud computing services in the world. Even with its market share eroded, it will stay the leader in U.S. e-commerce. Finally, it is worth noting that Amazon has started to downsize its huge delivery infrastructure to save money.

As Amazon goes through this transformation, watch its stock drop by half from its 52-week high.

About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.