Please ensure Javascript is enabled for purposes of website accessibility

Why Amazon.com Sank 13% in January

By Joe Tenebruso – Feb 12, 2016 at 8:20PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Is this the buying opportunity investors have been waiting for?

What: Shares of Amazon.com (AMZN -3.01%)(AMZN -3.01%)fell 13.2% last month, according to data provided by S&P Global Market Intelligence. After initially pulling back along with the overall market, the e-commerce behemoth's shares accelerated to the downside after its fourth-quarter earnings report.

AMZN Chart

AMZN data by YCharts.

So what: Heading into its Q4 earnings release, Amazon's shares had more than doubled over the preceding 12 months.

AMZN Chart

AMZN data by YCharts.

After such a steep run-up in its share price, investor expectations for Amazon were high. So when the company reported $1.00 per share in earnings -- well below the $1.56 Wall Street was expecting -- Amazon's shares were punished. Momentum and other short-term focused investors fled the stock, accelerating the decline.

Now what: The pullback has continued into February, with shares hitting a low of $474 on Feb. 9.

AMZN Chart

AMZN data by YCharts.

Notably, Amazon itself is using the decline as an opportunity to buy back its own shares, with the company recently announcing that it was more than doubling its share repurchase program to $5 billion.

With the e-commerce titan growing increasingly dominant in the massive and high-growth online retail and cloud computing markets, investors may wish to consider buying shares alongside Amazon.

Joe Tenebruso has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon.com. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Amazon.com, Inc. Stock Quote
Amazon.com, Inc.
AMZN
$113.78 (-3.01%) $-3.53

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
329%
 
S&P 500 Returns
106%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 09/26/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.