Wall Street rallied shares of Amazon.com in early trading after the company posted a much smaller loss than expected and said it would acquire three Internet companies to help it expand into new markets.
The online bookseller's stock shot up more than 10 percent in the first half hour of trading to 91-7/16, up 8-11/16 from yesterday's close of 82-3/4.
In addition, Amazon yesterday reported a 2-for-1 stock split and posted a net loss for the first quarter ended March 31 of $9.26 million, or 40 cents per share.
That's narrower than a net loss of $9.33 million, or 41 cents per share, reported for the previous quarter ending December 31, but wider than the net loss of $3.04 million or 16 cents per share reported for the first quarter in 1997. Amazon posted revenue of $87.4 million for the latest quarter, up 446 percent over the same period last year.
Analysts were expecting red ink of 47 cents a share for the latest quarter, according to Briefing.com.
The company said it is acquiring Bookpages, a large online bookseller in Britain, and Telebook, Germany's No. 1 online bookstore, to better enter online markets in Europe. It will leverage its third acquisition, Internet Movie Database, in an effort to support its eventual entry into online video sales.
"Now is the time to invest again aggressively to extend our reach," said Joy Covey, chief financial officer for Amazon.com.
The acquisitions are only Amazon.com's latest attempt to expand its online offerings. Just last week, Amazon gave its first public indication that it was planning to move into the online music sales market. The company is now asking visitors to its Web site for input on the "music store of their dreams" but has given no indication as to how soon such a store might be launched. Similarly, Amazon didn't say how soon it might offer video sales or increased services in Europe.
The Net bookseller said it will incur total charges of about $55 million in connection with the acquisitions, which were paid for with a combination of cash and common stock. Amazon said it would issue an aggregate of about 540,000 shares of common stock but did not say how much it was paying for each acquisition.
Reflecting its red-hot stock valuation, Amazon.com said its directors had approved the 2-for-1 split of common shares, which becomes payable June 1 to shareholders of record as of May 20.
The online book giant, which went public last May at $18 a share, has traded as high as $100. It closed yesterday at $82.75, down more than 2 points. Despite its high-flying stock price, the company has yet to report a profit, a characteristic typical of many Internet-related companies.
Special projects editor Dawn Kawamoto contributed to this report.