RICHMOND, CALIFORNIA – JUNE 21: The Amazon Prime logo appears on the side of an Amazon delivery truck on June 21, 2023 in Richmond, California. The Federal Trade Commission (FTC) has sued Amazon, alleging that the company misled millions of customers into signing up for Prime subscription services and intentionally complicated the cancellation process. (Photo by Justin Sullivan/Getty Images)
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If you bought $10,000 worth of Amazon stock in 2006, your investment would be worth over $1.4 million today. You can stop reading now, or maybe not.
Wayne Duggan at US News & World Report calculate the above stat. For some it is the source of awe. For others it is the source of joy. But for exponentially more, it is the essence of pain. I wish they would keep it.
Which of course is the point. This is implied in a $10,000 investment growing in value to $1.4 million none he saw it coming.
While wise minds can debate how efficient the stock market is, there is no debating the truth that the stock market is forward looking. Which means they price the future into the present.
In light of Amazon’s supposed future in 2006, markets certainly didn’t see it coming Amazon. If so, $10,000 invested in Amazon in 2006 would be worth about $10,000 today. Take it?
Amazon’s staggering stock returns over the past twenty years raise a key question: why does Amazon continue to face substantial antitrust scrutiny? How could it face antitrust scrutiny given its origins?
Amazon is currently facing an FTC antitrust lawsuit, among other political attacks. The lawsuit alleges that the Seattle giant enjoys an illegal monopoly through “a combination of anti-competitive and unfair strategies.” Amazon allegedly “suppresses competition” by penalizing third-party sellers who offer lower prices elsewhere, as well as allegedly biasing searches in favor of its own private label products.
Let’s start with the first claim. Absurd is the adjective that keeps coming up. To see why, consider why Amazon is one of the most valuable companies in the world today. It can claim the status precisely because shoppers visit Amazon.com more than any other site. In translation, Amazon offers third-party suppliers volume that they could not get anywhere else. Which means that its demand that sellers offer the lowest prices on its site in exchange for profits derived from significant volume is a blinding glimpse of the obvious.
Amazon obviously cares about its customers. Of course, what’s good for its customers is great for third-party vendors. Amazon sales volume exceeds price per sale.
As for Amazon favoring its own private label products in searches, it would be shooting fish in a full barrel to notice that all businesses, including grocers, are doing this. But this opinion piece won’t shoot any fish.
Instead, it will be said once again that Amazon is one of the most valuable companies in the world. The latter is a sign that Amazon’s customers hold the brand in high esteem. Which means it wouldn’t just be harmful for Amazon not to prominently display its private label products, it would also masochistic.
From there, it’s helpful to go back to Amazon’s amazing 20-year stock performance to see the abject folly of the FTC’s antitrust lawsuit. As these returns again show, no one knew what Amazon was going to become. In business, the future is opaque.
Which means it’s just as difficult, if not impossible, for investors, let alone the government, to see what competition awaits Amazon and where it’s coming from. Rest assured it’s coming though.
Check out Amazon’s stock. It’s all the evidence one needs for plenty of competition ahead, which is why the antitrust spinoffs need to stop so Amazon can compete instead of facing regressive ankles from the FTC.
