Amazon's stock slides while traffic climbs
Shares in the leading online book retailer drop precipitously over two days, despite good news about its traffic numbers.
Shares of the leading e-tailer fell $8.38 today to $48, taking the stock near its 52-week low of $41.
Also today, PC Data Online reported Amazon traffic and buying activity in March were up 12 percent over February's numbers. But those numbers couldn't overcome the flood of bad news about e-tail stocks in recent months and the general drop in the Nasdaq, J.P. Morgan Securities analyst Tom Wyman said. The Nasdaq index dropped 2 percent today after falling 7 percent yesterday.
"As a core holding for lot of tech investors, when the Nasdaq sells off, Amazon tends to sell off with it," Wyman said.
The sell off in Amazon shares could mean more trouble for the broader e-tail market, which has been in a freefall. Amazon-allied Pets.com, for instance, has seen its stock drop from $11 on its first day of trading in February to $2.63 today. Meanwhile, Buy.com's stock has dropped from a high of $30.25 set after its February IPO to a new low today of $6.25 a share.
Amazon had resisted much of the sell off, hovering in the $60 range until yesterday.
Amazon hit its 52-week low in August. The stock has dropped 24 percent since Tuesday's close and 58 percent since its 52-week high of 113 set in December.
Other e-tail stocks could drop into the less-than-$1 range, Wyman said.
"Unfortunately, some investors have grown weary of the pounding on the e-tailing sector," he said.
Amazon reclaimed leadership of traffic and reach in March after falling behind CDnow in February, according to PC Data Online.