The stock price of Amazon.com has dropped as much as 13% in the past month. All the blame, according to a long series of articles in the mainstream media has been laid at the feet of the giant retailer’s second-largest shareholder, the billionaire Greenlight Capital investor David Einhorn.
Einhorn, for the first time in his career, was outed as an Amazon bear. His latest letter to shareholders detailed his “final,” unsolicited presentation to the Amazon board and his analysis that the stock is worth $3,000. Einhorn claimed a decline to $1,100 was an “accurate view of the company’s valuation.” He didn’t provide any serious evidence.
As a tech entrepreneur, I am baffled that the large media outlets have zeroed in on one investor. Despite owning almost a single percent of Amazon, Einhorn has minimal influence. Instead, the Wall Street Journal, the New York Times, CNBC and TheStreet have collectively stoked the flames by writing negative stories about Amazon for weeks and barely a slap on the wrist to Amazon management for justifying Amazon’s high valuation.
Maybe it’s because Amazon.com has outpaced expectations for nearly a decade. In those first five years, Amazon traded mostly sideways, logging double-digit gains and losses only on the margin, all while managing to grow its revenue at a stunning rate. For example, in 2009, Amazon grew its annual revenue by 69%. In 2010, it grew at 69.8%. In 2011, it grew by 68.1%. It then fell and grew by just over 40% in 2012. Only in 2013 did Amazon’s annual revenue outpace $100 billion.