“Good” News Doesn’t Sway Traders On $AMZN

Amazon investors received two news packages Tuesday morning that should have spurred celebration. News leaked that Amazon is readying a set top device, a la Apple TV, capable of streaming PC games and video content. The device, which will reportedly ship next month, will resemble a memory stick or a dongle that plugs into the computer, according to TechCrunch.

Investment firm Oppenheimer also upgraded the stock. Analysts argued that recently announced prime price hikes will prove profitable for the online retailer. The investment firm raised the online retailers’ price target $15 Tuesday morning to $455.

$AMZN underperformance creates buying opportunity, says Oppenheimer. Raises price target to $455.

— SassySPY (@Sassy_SPY) Mar. 18 at 07:42 AM

The stock clawed into the green this morning—barely. Cashtaggers watched to see if the stock would hold the gains. If $AMZN couldn’t stay up after such good news, longs would give up on the stock, cashtaggers said.

$AMZN upgrade and streaming box announced on the same day. If it can't break out with conviction today, longs may start bailing.

— Rotten Al (@RottenAl) Mar. 18 at 08:36 AM

Many cashtaggers argued that neither Oppenheimer’s bullish note nor the news that Amazon would venture even father into the content business changed their investment thesis. Sentiment on the stock is 69% bullish and 31% bearish, according to StockTwits’ analytics.

The bears beat the drum that Amazon’s sales growth is slowing too much to warrant its earnings multiple. Amazon fourth quarter revenue grew 20%, year-over-year, to $25.59 Billion. In 2012, fourth quarter revenue grew 22% to $21.27 Billion. In 2011, fourth quarter revenue grew 35% to $17.43 Billion. Amazon’s 2013 fourth quarter earnings fell far short of Wall Street consensus estimates.

$AMZN Incredible. Growth slowing. Very little net income & yet Oppenheimer raises price target from $440 to $455. Market won't be fooled.

— bgfalcon91 (@bgfalcon91) Mar. 18 at 09:06 AM


$AMZN Net Profit margin of 3%, return on equity 1% 3 straight years of earnings decline. Why on earth does this stock deserve a P/E of 65?!

— Chris Papadopoulos (@GekkoTrader) Mar. 17 at 11:22 PM

The bulls, meanwhile, said that the worst is behind Amazon. They have faith in its content strategy, intended to compete with the likes of Netflix, $NFLX, and revised prime pricing. Some even think Amazon’s stock chart looks poised for an upswing.

$AMZN Closed above 50 dma. First time for that since earnings debacle.

— Mike (@Fritter70) Mar. 17 at 05:21 PM


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