During question time at the Berkshire Hathaway AGM over the past two years, Warren Buffett has enthused about the prowess of Amazon.com founder Jeff Bezos. This year the Oracle spoke of the “amazonisation” of entire business sectors – and partner Charlie Munger suggested Bezos is the best entrepreneur alive.
Stock market investors agree. On the one hand, they have pushed Amazon shares to a fresh high beyond $1,000 each this week – 10 times higher than their absolute peak in the Nasdaq bubble that burst in January 2000. On the other, they smash anything that seems vaguely in the way of the Amazon tsunami.
Take the recent listing of Blue Apron, a company which home delivers tailor-made fresh ingredients, what the Americans call “meal kits”. On June 1, the company’s announcement of an IPO was warmly welcomed, with the promoters setting the pre-listing share sale price at between $15 and $17.
Three weeks later Amazon announced the acquisition of WholeFoods for $13.7bn. Fearing this would signal the Bezos Behemoth’s entry into meal kits, Blue Apron’s investors demanded a repricing to between $10 and $11. The stock opened at $10 and has fallen steadily ever since, trading yesterday at $6.50. It’s tough taking on Goliath. Especially when he fights like David.