Following the record-breaking 2017 Prime Day, the Whole Foods Market Inc. (NASDAQ:$WFM) bid, and a number of announcements including Amazon Wardrobe, Amazon Inc (NASDAQ:$AMZN) was the focus of two investors calls on Thursday that expressed concerns that the e-commerce giant is getting too big.
Douglas Kass, for instance, the head of Seabreeze Partners Management, said government intervention could be inevitable. “I am shorting Amazon today because I have learned that there are currently early discussions and due diligence being considered in the legislative chambers in Washington DC with regard to possible antitrust opposition to Amazon’s business practices, pricing strategy and expansion announcements already made (as well as being aimed at expansion strategies being considered in the future.”
Elaborating further, Kass announced that he is taking a short position on the stock, or a bet that it will fall. The hedge-fund manager said Amazon’s stock could fall 10% overnight once the market gets wind of the talks in the legislative chambers.
To say that Amazon has had a busy summer would be a bit of an understatement. And as the company continues to grow, its dominance will continue to create tremendous stress for brick-and-mortar retailers, who are now suffering the consequences of their scramble to catch up.
In January, EU antitrust regulators applauded the end of audiobook exclusivity between Amazon and Apple Inc. (NASDAQ:$AAPL). Additionally, last August, Amazon’s offices in Tokyo were searched by the Fair Trade Commission as there was suspicion that it was breaking antitrust laws.
Kass reinforced his argument in a Thursday comment.
“My understanding is that certain Democrats in the Senate have instituted the very recent and preliminary investigation of Amazon’s possible adverse impact on competition,” he said. “But, in the Trump administration we also have a foe against Jeff Bezos, who not only runs Amazon but happens to own an editorially unfriendly (to President Trump) newspaper, The Washington Post.”
Keep in mind that it’s not just Kass who has expressed doubts about Amazon. In fact, Steve Kaplan, a trader and True Contrarian blogger, joined Kass on Wednesday with his own short position. Kaplan stated that Janet Yellen is incorrect and a recession is approaching.
Kaplan said: “We are likely to experience an especially severe recession since so much money has come out of safe time deposits like bank accounts and money-market funds and has gone into fluctuating assets including real estate, corporate bonds, stocks, and especially the most popular overpriced garbage including Amazon, Tesla (NASDAQ:$TSLA), Netflix (NASDAQ:$NFLX) , Nvidia (NASDAQ:$NVDA), etc.”
On Thursday’s trading session, Amazon shares are down 0.2%, but up 34% so far this year. To date, the S&P 500 index is up 9.3% for 2017.
Featured Image: twitter
