Amazon Stock Jumps on Wal-Mart Rumour

06 March 2001

After watching its share price nosedive 13% last week [WAMN: 01-Mar-01], online titan yesterday saw its stock bounce back by over 20% following unconfirmed rumours of an alliance with retail colossus Wal-Mart.

The reports, appearing in British paper the Sunday Times, claim that the e-tailer’s founder Jeff Bezos and Wal-Mart chief executive Lee Scott are negotiating a deal which will be unveiled within the next six months.

The deal will, it is believed, involve Amazon becoming e-commerce supplier to Wal-Mart, which in turn will take advantage of the e-tailer’s experience in home delivery. Meanwhile, Amazon kiosks could appear in Wal-Mart’s 4,500 stores.

Particularly important for the online bookseller – which has persistently failed to make a profit despite growing sales – will be a reported cash injection from Wal-Mart and a percentage of all sales made through the bricks-and-mortar retailer.

Neither party has confirmed the reports, but the speculation alone saw Amazon’s stock price rise $2.37 to $12.37 in early trading yesterday.

News source: BBC Online Business News (UK)