Could Amazon become the first $1 trillion company?
We’re talking market capitalisation. That’s how much a company is valued by the stock market. There’s never been a company valued at $1 trillion but could Amazon become the first before the decade is out? One analyst thinks so.
RBC Capital’s managing director Mark Mahoney provided his “just for fun’ thoughts at the Business Insider annual conference, Ignite.
And it isn’t perhaps as outlandish as you may think (check out his workings below). Amazon has doubled its value in the past 18 months and is worth roughly $360bn. Founder Jeff Bezos recently became the world’s 3rd richest man.
The core ecommerce aspect of the business is in rude good health with Amazon’s own retail business doing well and the third party aspect of operations (where margins are stronger) now accounting for more than half of all sales.
And don’t forget that Amazon Web Services (AWS) is a huge and massively profitable part of the Amazon business that’s growing fast.
The source of disquiet for me will be one shared by many Amazon sellers. Market capitalisation is one thing but will they continue to invest in the basics like customer support? In recent months it’s clear that 3P sellers have been having difficulty dealing with the support teams and service is deteriorating. Such swift growth could suggest that some aspects of Amazon are creaking under the rapidity of expansion.