Wells Fargo analysts are wondering whether Jeff Bezos’ purchase of the Washington Post five years ago is costing Amazon.com Inc. big time now.
Irrespective of the answer, if President Trump was hoping to spur a case against the e-commerce and tech giant, analysts think he will ultimately fail.
“Whether the Washington Post purchase by Jeff Bezos for $250 million in 2013 cost Amazon ~$75 billion in market value five years later, we may never know,” analysts led by Ken Sena wrote in a note. “But, our view here is that we don’t see how the current Presidential rhetoric helps a U.S. case against Amazon.”
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Trump has unleashed a tweet storm against Amazon AMZN, +1.33% for nearly a week, expressing his “concerns” about the company’s state tax collection practices, what it pays the U.S. Postal Service for deliveries, and “the Fake Washington Post.”
Amazon shares are down 2.5% for the week so far, and have fallen 6% over the past month. The Dow Jones Industrial Average DJIA, +0.96% is down 2.1% for the past month, and the S&P 500 index SPX, +1.16% is down 1.7% for the period.
Since Amazon shares started to react to the first report of Trump’s ire last week, the stock has shed $52.8 billion in market capitalization. Based on FactSet data on his personal holdings, Jeff Bezos could have lost $8.6 billion in that time.
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Despite the effort, Wells Fargo doesn’t think Trump is making a case against Amazon. In fact, he might just be making a case harder.
“[C]ertain tenets of the arguments made by the president against Amazon have been undermined by third-party fact checkers, [so] we do not see how the president’s recent actions improve the basis for a case being brought by the U.S. government against Amazon,” the note said.
However, Trump’s talk about retail store closures and tax evasion could inspire state and international governments to take a closer look.
“[A]s the potential exists for the rhetoric and tweet barrage to intensify, we see the president’s actions as potentially stirring additional scrutiny of Amazon beyond the federal government, particularly where tax is concerned,” Wells Fargo wrote.
Read: Why Trump can’t tell the USPS what to do in an Amazon brawl
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Trump could also be choosing to pick a fight with one of the country’s tech leaders at a time when the U.S. is in a heated tech leadership battle with China. Trump is being encouraged to cancel a multibillion-dollar contract between Amazon and the Pentagon to provide cloud computing services, sources told Vanity Fair.
“[I]t does not make sense to us why the U.S. would want to place crosshairs on a main source of its domestic technology leadership and innovation at a juncture when the U.S. and China are squaring off against one another across so many areas of economic of economic activity,” Wells Fargo said.
“More specifically, the competitive ability to harness data and compute resources, where AWS offers important strategic value to the U.S. and many of its industry leaders/customers of the AWS Cloud, will become more important (not less) to broader economic and industry leadership in the years to come, as we strongly believe,” the note said.