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Top 20 Stories of 2015: #12 Amazon Takes Huge Loss In 2014

Every weekday in December, tED magazine is counting down the Top 20 Stories of 2015. Below, the #12 most-viewed story of the year, originally published on January 2, 2015.

 

2014 was not a great year for Amazon.com. In fact, it was its worst since 2008. As a result, founder Jeff Bezos has taken a huge financial hit.

The questions now are: will Bezos continue his free spending ways in 2015, and will investors finally give up on the chain of monthly losses?

Bezos saw Amazon lose $7.4 billion in 2014, dropping his personal net worth to around $26 billion. But, shares of Amazon dropped 22% in 2014, which is the company’s second worst yearly report. In 2008, Amazon lost 44%.

Since the Amazon earnings report is not divided into sections, there is no specific information on the yearly results for AmazonSupply.com.

However, Amazon stock holders were not impressed with Bezos and his free-spending ways. Many left after the Fire smartphone rollout was unsuccessful. Others grew extremely concerned about the large network of warehouses Bezos bought near larger cities to decrease delivery times.

But many investors still think Amazon is a long-term investment, and point to the successes of the Amazon Web Services cloud computing business. Many startups are using it as their computing provider. Plus, Amazon just reported a huge jump in Amazon Prime subscribers, where buyers pay a one-time $99 fee for free shipping. Bezos just recently increased the price from $79 to $99, and that has apparently had little to no impact.

But Amazon has struggled of late to hit its earning estimates. According to Zacks, Its third quarter result was the third negative earnings report in the last four quarters, and the average negative report of 40.36%.

While we will watch to see what Bezos decides to do in the industrial distribution markets in 2015, all face additional competition this year. Chinese retail giant Alibaba could potentially enter the distribution market this year. Alibaba founder Jack Ma has the money to do it, after he added $25.1 billion to his revenue thank to a huge increase in the company’s September IPO.

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