Amazon becomes world’s second $1tn company

05 Sep, 2018 - 00:09 0 Views
Amazon becomes world’s second $1tn company

The Herald

NEW YORK. – Amazon has become the second company to be valued by Wall Street at $1tn, a matter of weeks after Apple reached the milestone first.

Yesterday, a rise in the share price of Amazon, which is listed on the Nasdaq stock exchange in the US, briefly took it above the trillion-dollar watermark for the first time. The company’s value hovered just shy of $1tn before noon.

Achieving the valuation marks the latest chapter in an astonishing story of growth for the company, founded by businessman Jeff Bezos in Seattle, Washington, in 1994.

Less than 25 years later, the company has garnered a major presence in everything from retail, to groceries, to video streaming, helping it rack up revenues of $178bn (£139bn) last year.

Bezos became the world’s richest man in the process, with a net worth estimated at more than $167bn on Tuesday, according to Forbes.

Amazon went public at $18 a share in 1997 – on Tuesday those shares hit $2,050, pushing the value of the whole company over $1tn.

But with rapid growth has come fierce criticism over the company’s attitude to tax and workers’ rights.

The company that started life selling books and CDs online has morphed into a behemoth that now makes much of its money from hosting websites such as Airbnb, Netflix and Unilever. Amazon Web Services is currently the front runner for a $10bn contract to provide cloud computing for the US department of defence.

Amazon’s size – and Bezos’s fortune – have attracted the ire of president Donald Trump. Bezos bought The Washington Post in 2013. While he has kept the news organisation as a separate company from his Amazon, the paper’s criticism of Trump has sparked numerous attacks on Bezos and Amazon from the president.

“Amazon Washington Post has gone crazy against me,” Trump wrote on Twitter in July, the latest in a series of attacks. Trump has accused Amazon of ripping of the US Postal System (USPS) and convened a task force to assess USPS’s finances.

He has also threatened a wider investigation into Amazon’s dominance in online retail. The company accounts for 49 cents out of every e-commerce dollar spent in the United States and has been blamed for the failure of once powerful retailers such as Tots R Us.

“Is Fake News Washington Post being used as a lobbyist weapon against Congress to keep Politicians from looking into Amazon no-tax monopoly?” Trump asked last year.

The company has also attracted criticism from the left. Amazon is currently conducting assessing where to build a second headquarters in the US, dubbed HQ2. The massive complex is expected to add 50,000 jobs in the city that wins but also looks sure to come with similarly outsized tax breaks for the company.

In New Jersey the company was offered $7bn to build the headquarters in Newark, a cash-strapped city that critics charge could easily find better ways of spending the money than giving it in tax breaks to one of the world’s most profitable companies.

Seattle, Amazon’s home town, has also developed an ambivalent view of the company. Rents in the city have soared, pushing poorer people out, and Amazon lobbied hard to stop the city imposing a tax on large corporations that was meant to tackle growing

Amazon had been vying with Apple to reach the landmark figure for months but lost out when stock markets responded favourably to Apple’s financial results last month.

Both companies now have a stock market value more than a third the size of the UK economy and larger than the economies of Turkey and Switzerland.

While the energy company PetroChina was cited as the world’s first trillion-dollar company after its 2007 flotation, the valuation is considered unreliable because only two percent of the company was released for public trading.

Saudi Arabia’s national oil company Saudi Aramco was expected to achieve a $2tn valuation via a stock market listing, but the oil-rich Gulf state has reportedly put the plan on hold. – The Guardian

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