Amazon Last Week: Conflicting Drivers and a Slight Fall



Last week was slightly downbeat for Amazon (AMZN), which fell 1%. The stock was at its weekly high of $1,815 on November 4 and its weekly low on November 8. Year-to-date, its stock has risen 16%.

So what were its key drivers last week?

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Amazon India’s deal with BookMyShow

On November 2, Amazon India made a deal with BookMyShow, a popular movie ticketing platform in India. According to Business Today, the deal allows movie enthusiasts to get discounts when they book tickets using Amazon Pay. Some of these offers will be open until November 14. The deal could add a sizable amount of transactions through Amazon Pay. The Economic Times‘ tech division reported that a five-year agreement had been signed.

Amazon Robotics Innovation Hub

On Wednesday, November 6, Amazon declared plans to generate 200 jobs in Massachusetts by building a New Robotics Innovation Hub there by 2021. It will spend over $40 million on the hub, which will focus on advanced manufacturing. For the past eight years, Amazon has invested more than $3 billion in generating over 4,000 full-time jobs in the state.

This new facility strengthens Amazon’s commitment to improving the safety and efficiency of its warehouses, also known as fulfillment centers. Earlier this year, it launched two warehouse robots, Xanthus and Pegasus.

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Amazon adds a deferred payment option for Australian customers

On November 7, Reuters reported on a deal between Amazon and Australian financial technology platform Zip Co. Amazon’s e-commerce website in Australia will feature a payment option from Zip Co, which provides deferred payment services to its members. Zip Co operates on a buy-now, pay-later business model.

As part of the deal, an Amazon affiliate will possess warrants to buy up to a 4.2% stake in Zip Co. The Australian company’s shares gained 24% after the news broke. Amazon’s move to add the deferred payment option could boost its sales in the region.

Streaming services

On November 7, CNBC reported that Disney and Amazon had reached an agreement on distribution. Customers using Fire TV and the Fire Tablet will get access to a seven-day free trial of Disney+. The offer will be available starting on November 12.

In a related report about over-the-top streaming services, BBC News reported that BritBox, Amazon Prime Video’s competitor in the United Kingdom, had entered the media streaming space. BritBox, a joint venture of British broadcasters BBC and ITV, will charge subscribers 5.99 British pounds per month, the same as Amazon Prime Video. BritBox hopes to gain market share by airing shows that are UK-centric. Reemah Sakaan, ITV’s group director, said BritBox has “the widest range of UK box sets of any service.”

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AWS shares the onus of keeping data secure

In other news, AWS (Amazon Web Services) is facing criticism after Capital One Financial (COF) reported a data breach in July. Amazon’s cloud division denied responsibility for the hack, which exposed the sensitive data of 106 million Capital One customers. Reuters reported that an AWS spokesperson explained that AWS security has been watertight, and the breach was the result of privacy settings used by Capital One.

Werner Vogels, Amazon’s chief technology officer, declined to face the heat of this data breach. He said that it’s not practical for Amazon employees to go through the cloud servers and comment on how customers should handle sensitive data. Gartner originally published a report in January 2017 suggesting that until 2025, almost 99% of cloud breaches would happen because of customers and not service providers.

Peer comparison

In comparison, Alibaba Group (BABA) and Baidu (BIDU), Amazon’s Chinese peers, gained during the week. Alibaba beat its fiscal 2020 second-quarter estimates when it declared its earnings results on November 1. Its stock closed at $176.67 on October 31. Since then, it’s has gained 6%. Baidu outperformed market expectations in its recently released third-quarter financials. After its earnings release on November 6, its stock shot up 13%. Last week, Baidu stock rose an impressive 16.5%.


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