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AMAZON TO REBOUND FROM 23% YEAR LOSSES?

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AMAZON TO REBOUND FROM 23% YEAR LOSSES?

Dec 10 2014, 11.45am GMT

STOCK.com

Amazon shares are starting to recover from the no-Drone news with the purchase of GoodGame.

Amazon has been feeling the effects of their acquisitions and business development programmes. In September Amazon bought Twitch, the broadcasting network for computer gamers. Shares fell at the time from 4 September’s 340 to October’s low of 285. After a positive November, shares plummeted again at the start of December from 340 to yesterday’s 301.

However the recent rebound is clearly tied to two pieces of news. Yesterday Amazon announced that Twitch will buy GoodGame, owner of professional game teams. The company also reported that they may take their drone research from the US to the UK.

GoodGame operate across web and mobile platforms and cater to over 230 million registered users worldwide, with 1100+ employees from over 50 nations, they are the largest German employer in the gaming software industry. The acquisition will give Amazon a large stake in the gaming market, aptly named e-sports. It also provides Amazon with more digital advertising share, as GoodGame and Twitch sign up advertisers and sponsors on their broadcasts, giving a cut of revenue and subscription fees to the professional gamers.

Amazon is also dealing with the choice of moving their drone research to the UK – they have a drone R&D department in Cambridge. This follows the indecisiveness of the Federal Aviation Administration (FAA) to allow Amazon to test drones that they want to use for 30 minute delivery schedules. They have waited since June and are soon ready to make the decision whether they locate away from the US, which has strict regulation on the flying of unmanned aircraft.

The confidence that Amazon is exhibiting to step forward into new projects may prove infectious for investors and rescue Amazon from their downward trend that has pulled the company down by over 23% from the end of January (407) to today (312).

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