Amazon has become the first public company in the world to lose its trillion-dollar market cap status as tightening monetary policies, rising inflation, and lackluster earnings have resulted in a historic stock selloff.
On Wednesday, the company saw its stock value fall by 4.6%, plunging its market value from $1.88 trillion to $878 billion in just 16 months.
The decline in the company’s market value comes at a time when tech companies across the globe are seeing their revenues shrink. In the U.S. alone, the top five tech companies have seen their market value plummet by $4 trillion.
For Amazon, the decline in market cap has come along with a slowdown in consumers’ use of eCommerce channels as they have reverted to shopping in physical stores. This shift in consumer habits, rising costs and increased interest rates have had a detrimental effect on the company’s revenue growth and caused Amazon’s stock value to decline by nearly 50% this year, Bloomberg reported.
Last month, Amazon’s stock tumbled 20% in extended trading after the company projected sluggish sales during the holiday season, with consumers reducing spending in light of the ongoing economic crisis. The company expects its revenue to be in the $140 billion to $148 billion bracket in the last quarter, significantly lower than analysts’ expectations of $156 billion.
