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Amazon Stock: Better Recovery than Disney and Netflix?


Aug. 12 2019, Updated 7:18 a.m. ET

Amazon (AMZN), Walt Disney (DIS), and Netflix (NFLX) stocks fell on Monday. On the same day, the S&P 500 Index had its most significant loss of the year. However, the equity market recovered partially on Tuesday.

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Amazon stock is recovering

Disney, Netflix, and Amazon stocks followed a similar trend. Was the recovery in Amazon stock better than Disney and Netflix? Let’s find out.

The stocks are being impacted by various cues like earnings, trade wars, and rising competition. The trade war between the US and China seems to be taking a toll on equity markets. China devalued the yuan in retaliation to President Trump’s additional tariffs.

Why did Amazon stock fall?

Amazon (AMZN) stock fell 3.2% on Monday and recovered 1.3% on Tuesday. Amazon stock has fallen about 4.2% in August. Apart from the falling equity market, the stock was impacted by the news that Jeff Bezos sold shares in the company.

Now, Amazon has launched Amazon music benefits for its Prime student members. The members can access unlimited music for $0.99 per month. Students who aren’t Prime members get a free six-month trial. Amazon wants to attract younger consumers to its streaming service.

In a press release, Amazon Prime’s vice president, Cem Sibay, said, “With Prime Student, members can enjoy this new music benefit along with exclusive student offers throughout the year, making it easy to access the best of shopping and entertainment from Prime at a great value.”

Also, Amazon stock fell after the release of its second-quarter results. A lower earnings guidance for the next quarter and higher cost pressures impacted Amazon stock. The company is looking forward to improving its one-day delivery infrastructure, which is increasing its cost.

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Disney stock could fall more

Disney stock fell 2.4% on Monday but recovered 2.6% on Tuesday. The stock has fallen about 0.8% in August. The company posted its third-quarter earnings on Tuesday. Disney’s revenues and profits missed analysts’ estimate. The company’s revenues at $20 billion were about 6% lower than the forecast, while its EPS of $1.35 was about 23% lower than the forecast. The stock opened almost 5% lower on Wednesday. If the fall in Disney stock continues during the day, then it might lose more than Amazon stock for the month.

Disney announced that it will launch its streaming service Disney+ at $13 per month in November. The service will also include ESPN Plus and Hulu—an ad-supported version. These services taken separately will cost customers $18 per month. However, the bundle will be available at a $5 discount per month.

Disney+ is priced almost at the same level as Netflix (NFLX). Apple (AAPL) and NBC Universal are also in the process of launching their streaming services.

Netflix stock recovery lower than Amazon stock

Netflix stock seems to be recovering slowly. The stock fell 3.5% on Monday but recovered 0.8% on Tuesday. The stock has fallen 4.0% in August. Netflix has fallen less than the 4.2% fall in Amazon stock for the month. Netflix’s EPS at $0.6 beat its second-quarter earnings estimate. However, the company reported a fall in its US subscriber base for the first time in a decade.

Netflix continues to be the market leader in the streaming service industry. To learn more, read How Netflix Stacks Up amid Intensifying Streaming Competition.

Correction: This post has been updated to show the current Disney+ monthly rate compared to the cost of services that aren’t bundled.


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