Amazon, Ford hit by massive losses on Rivian investments
Rivian's recent stock performance may have burned a hole in many a retail investor portfolio. It's also burned a big hole in Ford, and now Amazon's, quarterly performance.
finance.yahoo.com
Rivian's (RIVN) recent stock performance may have burned a hole in many a retail investor's portfolio. It's also burned a big hole in Ford (F), and now Amazon's, quarterly performance.
Last night in its first quarter earnings report, Amazon (AMZN) revealed it booked a $7.6 billion mark-to-market loss on its investment in Rivian, which led to an overall $3.8 billion net loss for the quarter. Amazon owns an 18% stake in the electric vehicle maker.
Earlier this week, Ford reported an overall $3.1 billion loss for the first quarter, due to its mark-to-market loss of $5.4 billion on its Rivian investment. Ford has a 12% stake in Rivian.
Amazon has additional problems:
Amazon Projects Slower Growth, Raising Fears of Consumer Letdown
Amazon.com Inc. acknowledged that a hiring and warehouse-building binge during the pandemic is catching up with the company as e-commerce sales growth inevitably slows from the torrid pace of the outbreak.
www.bloomberg.com
Amazon, America’s second-largest private employer, hired roughly 780,000 people over the past two years, bringing its workforce to 1.62 million. It also raised wages, paid out bonuses for new hires and was willing to send out half-empty vans to ensure customers got their packages on time.
The costs piled up, with Amazon reporting $112.7 billion in total operating expenses, including $20.3 billion in fulfillment outlays during the quarter ended March 31. In an attempt to blunt the impact of inflationary pressure, the company on Thursday began levying a first-ever 5% fee on independent sellers who use its shipping services. Prime members in the U.S. will spend $20 more a year for speedy shipping and other benefits such as the company’s streaming service.
Amazon was overstaffed for much of the first quarter, Olsavsky said, which in the company’s warehouses means workers sitting idle or managers asking for volunteers to go home without pay.
The company reported a net loss of $3.8 billion, or $7.56 a share, compared with profit of $8.1 billion, or $15.79 a share, in the period a year ago. Amazon said it included a loss of $7.6 billion in non-operating expense from its investment in electric carmaker Rivian Automotive Inc. It was the company’s first net loss in seven years.