Connect with us

Business

Is Amazon ready to raise the price of Prime delivery? Wall Street thinks so

Published

 on

When Amazon.com Inc on Thursday reports how it fared during the holiday quarter, a key question will be if the retailer will finally raise the price of Prime, its fast-delivery and media subscription.

The company has every reason to do so, analysts say. Amazon had to pay higher wages and signing bonuses to attract workers in a labor shortage. It had to spend more on shipping because it could not get products into the right warehouses. Even steel for construction projects cost more.

Amazon has forecast an operating profit between $0 and $3 billion, with analysts estimating it landed at the higher end of the range, at about $2.5 billion, according to research firm FactSet. Still, analysts are expecting a price hike soon for Prime. U.S. subscribers’ annual fees last went up four years ago to $119 from $99, and they went up four years before that from $79.

“It’s about time,” said Michael Pachter of Wedbush Securities. “Shipping costs have gone up, period.”

Mark Mahaney, an analyst at Evercore ISI, said pitching a price hike would be straightforward: fuel is more expensive, trucking is pricier, and goods themselves cost more. Subscribers – more than 200 million globally, including a majority of U.S. households – would pay more because they want fast delivery, he said. That’s potentially worth billions of dollars to Amazon’s bottom line.

“They have pricing power because the value proposition is so strong,” said Mahaney.

Rival Netflix Inc raised its standard U.S. rate weeks ago, too.

Amazon declined to comment on Prime’s pricing. In October, its CFO Brian Olsavsky said the retailer had no hike to announce, but “we always look at that.” He cited Prime’s value and the time since Amazon’s last increase as points to consider.

Among the factors he did not highlight: reliability. Three people who have worked at Amazon said the company would think twice before raising rates until its operation returned to normal, pointing to some shipping delays. The company had not added a major Prime benefit recently, and it has yet to make one-day delivery the default it promised almost three years ago.

“Given all of the Q4 delivery challenges, raising the price of Prime doesn’t seem appropriate,” said Scott Jacobson, a former senior manager at Amazon, who is now at Madrona Venture Group.

The decision also boils down to math, he said. More valuable than fees is the way Prime changes the behavior of customers, prompting them to spend more on Amazon to make the most of their membership. Would extra subscription revenue outweigh any hit to spending by those who quit?

Amazon said it has worked to minimize how the pandemic and operational difficulties have impacted customers. It said in recent years it has added Prime benefits, such as savings on drugs when paying without insurance, and it has sped up delivery while adding popular programs to stream.

The cause of Amazon’s latest challenges may come into focus in its results Thursday, stemming from a surge in demand, the ongoing labor and supply crunch, or both. The National Retail Federation has said holiday sales rose 14.1% during November and December, beating its prior forecast.

The Omicron variant of COVID-19 has surged, too, albeit at the tail end of Amazon’s U.S. holiday peak.

“You’ve got to believe that Amazon got hit heavily,” Pachter said, agreeing the company’s delivery uncertainties complicated a Prime hike.

“To raise my price when I literally ordered (some) hot sauce and it took like nine days to get here, that would be a poke in the eye.”

 

(Reporting By Jeffrey Dastin in Palo Alto, Calif; Editing by Lisa Shumaker)

Business

Stock market news live updates: Stock turn lower following last week's rebound – Yahoo Canada

Published

 on


U.S. stocks closed a choppy session lower Monday, weighed down by losses in technology shares, after the major indexes failed to sustain momentum from last week’s rally.

The S&P 500 fell 0.3%, and Dow Jones Industrial Average dipped 60 points, or 0.2% after each benchmark wavered between the red and the green throughout the trading day. The Nasdaq Composite declined 0.9%.

The moves follow a sharp rebound Friday that saw the S&P 500 surge 3% during the session and over 6% for the week, its second-best week this year and its first weekly rise since late May. Still, the benchmark index is on pace for its worst opening six months since 1970.

During the previous session, the Dow rose more than 800 points, or 2.7%, while the Nasdaq increased by more than 3.3%, leading to weekly gains for the indexes of more than 5% and 7%, respectively.

Some Wall Street strategists are hopeful that markets may have found a bottom.

“As bad as [this year] has been for investors, the good news is previous years that were down at least 15% at the midway point to the year saw the final six months higher every single time, with an average return of nearly 24%,” LPL Financial chief market strategist Ryan Detrick said in a note last week.

J.P. Morgan strategist Marko Kolanovic also predicted that U.S. equities may climb as much as 7% this week as investors rebalance portfolios amid the end of the month, second quarter, and first half of the year.

While sentiment on Wall Street appears optimistic, investors are in for a bevy of key economic reports and earnings that may sway markets this week and put hopes of a comeback to the test.

Quarterly results from Nike (NKE) and Micron (MU) will be closely watched for signs of rising inventories and slowing orders like Target and some other retailers have warned about recently, which may renew worries of an economic slowdown among Corporate America.

Traders also face a fairly loaded economic calendar this week, with the latest read on core PCE inflation – the Federal Reserve’s preferred measure of consumer prices, the Conference Board’s consumer sentiment survey, and manufacturing and housing reports due out through Friday.

A trader works on the floor of the New York Stock Exchange NYSE in New York, the United States, June 16, 2022. U.S. stocks fell sharply on Thursday as steep sell-off continued on Wall Street amid rising recession fears. (Photo by Michael Nagle/Xinhua via Getty Images)A trader works on the floor of the New York Stock Exchange NYSE in New York, the United States, June 16, 2022. U.S. stocks fell sharply on Thursday as steep sell-off continued on Wall Street amid rising recession fears. (Photo by Michael Nagle/Xinhua via Getty Images)

A trader works on the floor of the New York Stock Exchange NYSE in New York, the United States, June 16, 2022. U.S. stocks fell sharply on Thursday as steep sell-off continued on Wall Street amid rising recession fears. (Photo by Michael Nagle/Xinhua via Getty Images)

On the move

  • Robinhood Markets (HOOD)‘s stock surged 14% to close at $9.12 per share following a report from Bloomberg that cryptocurrency exchange FTX is considering a deal to acquire digital trading platform. Earlier in the day, Robinhood was in the spotlight after Goldman Sachs upgraded the brokerage to Neutral, about two months after the bank downgraded shares to Sell.

  • Coinbase (COIN) shares plunged nearly 10.8% to $55.96 after analysts at Goldman Sachs on Monday downgraded the cryptocurrency exchange to Sell from Neutral and slashed their price target on the stock to $45 from $70. Goldman also noted that while Coinbase recently announced it would cut 18% of staff, these layoffs will not be enough to bring the company’s costs in line with lowered sales.

  • AMC Entertainment (AMC) rallied to cap trading up 13.6% despite a turbulent session for the broader markets. The stock rose amid increased mentions across forums such as Reddit’s WallStreetBets and Stocktwits. AMC was also added to the Russell 1000 Index after an annual rebalancing.

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

Click here for the latest stock market news and in-depth analysis, including events that move stocks

Read the latest financial and business news from Yahoo Finance

Download the Yahoo Finance app for Apple or Android

Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, and YouTube

Adblock test (Why?)



Source link

Continue Reading

Business

Man uses Apple Airtags to find stolen Range Rover | CTV News – CTV News Toronto

Published

 on


An Ontario man whose car was stolen from his driveway in midtown Toronto twice in three months is revealing how he tracked and located his second vehicle.

“It’s pretty scary, but you can’t live your life in fear,” Lorne, whose surname CTV News Toronto has omitted due to safety concerns, said on Monday.

On April 1, his family moved to the Avenue Road and Lawrence Avenue area.

The following day, employees from an electronics company arrived at his house to install televisions. He placed the keys of his Range Rover Autobiography into a faraday box, which is designed to prevent criminals from copying a key fob and gaining access to a vehicle.

However, within minutes of the employees leaving his house, his car was stolen in broad daylight.

“The thieves were able to disable the tracker in my car, put there by the manufacturer,” Lorne said.

Meanwhile, his wallet, along with his kids phones, which were in the car, were thrown out of the vehicle before it was stolen, which Lorne said he believes was a preventive measure to avoid him from tracking the location of his car.

His Range Rover was never recovered.

Thirty days later, he got a new car of the same model, but this time, he placed three Apple AirTag tracking devices inside – one in the glovebox, another in his spare tire in the trunk and a third under his back seat.

While Lorne said he typically parks in his garage, last Wednesday night, he didn’t.

At 8:30 a.m. the next morning, he said his kids ran into his bedroom screaming, ”Daddy, daddy, your car is gone.” 

Right away, he logged into his Find My app and located all three of his AirTags near Manville and Comsock roads in Scarborough, listed as a metal recycling plant. 

After dropping his kids at school, he headed to that location and called the police. With no success reaching an officer, he drove to the 41 Division police station.

Toronto police spokesperson David Hopkinson confirmed to CTV News Toronto that a report of this nature was received by police on Thursday.

“I pressed my panic button and you heard it going off,” Lorne said. “The next day I was told they recovered nine cars.”

Due to an ongoing investigation, police could not comment further on the incident.

This time, however, Lorne said police recovered his vehicle and he anticipates it should be back in his possession soon.

While he said his AirTags worked in this case, he anticipates car thefts will only get increasingly sophisticated.

“It’s not foolproof,” he said.

Adblock test (Why?)



Source link

Continue Reading

Business

Company buying Trump's social media app faces subpoenas – Yahoo Canada Finance

Published

 on


NEW YORK (AP) — The company planning to buy Donald Trump’s new social media business has disclosed a federal grand jury investigation that it says could impede or even prevent its acquisition of the Truth Social app.

Shares of Digital World Acquisition Corp. dropped almost 10% Monday as the company revealed that it has received subpoenas from a grand jury in New York.

The Justice Department subpoenas follow an ongoing probe by the Securities and Exchange Commission into whether Digital World broke rules by having substantial talks about buying Trump’s company starting early last year before Digital World sold stock to the public for the first time in September, just weeks before its announcement that it would be buying Trump’s company.

Trump’s social media venture launched in February as he seeks a new digital stage to rally his supporters and fight Big Tech limits on speech, a year after he was banned from Twitter, Facebook and YouTube.

The Trump Media & Technology Group — which operates the Truth Social app and was in the process of being acquired by Digital World — said in a statement that it will cooperate with “oversight that supports the SEC’s important mission of protecting retail investors.”

The new probe could make it more difficult for Trump to finance his social media company. The company last year got promises from dozens of investors to pump $1 billion into the company, but it can’t get the cash until the Digital World acquisition is completed.

Stock in Digital World rocketed to more than $100 in October after its deal to buy Trump’s company was announced. The stock closed at $25.16 Monday.

Digital World is a special-purpose acquisition company, or SPAC, part of an investing phenomenon that exploded in popularity over the past two years.

Such “blank-check” companies are empty corporate entities with no operations, only offering investors the promise they will buy a business in the future. As such they are allowed to sell stock to the public quickly without the usual regulatory disclosures and delays, but only if they haven’t already lined up possible acquisition targets.

Digital World said in a regulatory filing Monday that each member of its board of directors has been subpoenaed by the grand jury in the Southern District of New York. Both the grand jury and the SEC are also seeking a number of documents tied to the company and others including a sponsor, ARC Global Investments, and Miami-based venture capital firm Rocket One Capital.

Some of the sought documents involve “due diligence” regarding Trump Media and other potential acquisition targets, as well as communications with Digital World’s underwriter and financial adviser in its initial public offering, according to the SEC disclosure.

Digital World also Monday announced the resignation of one of its board members, Bruce Garelick, a chief strategy officer at Rocket One.

The Associated Press

Adblock test (Why?)



Source link

Continue Reading

Trending