Well-known tech investor Gene Munster, who is a managing partner of Loup Ventures, argues that Amazon.com Inc is trading at a discount with investors getting the company’s retail business for free.
Munster, who is an investor in Amazon via Loup, said Amazon was a key beneficiary over the last two years with demand for products online during the pandemic.
“Since then, comps have gotten tough and the retail growth has slowed dramatically from 44% unit growth in March 2021 to flat growth in March 2022.”
Despite the potential trading discount, Munster said it could get worse for Amazon before it gets better, citing rising logistics costs and labor costs.
“Before framing in the case that Amazon’s retail business is trading for free today, investors should be bracing for things to deteriorate in 2022.”
Amazon Web Services could be the key to Amazon’s valuation, Munster argues. The estimates from Munster are AWS accounting for $700 billion in value and the company’s advertising segment accounting for $500 billion in value.
These two items together represent $1.2 trillion, or around the entirety of Amazon’s current market capitalization.
Source: benzinga.com/news/22/05/27486797/sum-of-parts-suggests-shareholders-could-get-amazons-retail-business-for-free
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