Long-term opinions on Amazon? Skeptical

by kctmo

I’ve been watching AMZN shares go loco over the last few days and I’m wondering how sustainable this growth is.

The main reason I’m skeptical is that I think we will see a revival of nationalism and protectionist policies after the pandemic. The failure of many European countries to have their own manufacturing resources is not going to be forgotten when the pandemic ends. Countries will want to rebuild national companies and will shun excessive reliance on foreign firms. For what I’m talking about, look at the recent situation with the delayed delivery of PPE from Turkey in the UK.

I believe Amazon in particular will attract a lot of scrutiny. There might be calls for european e-commerce champions. The European Commission launched an investigation into Amazon for anti-competitive practices in 2017. Given the political climate I anticipate at the end of this, whether the commission gets around to soon publishing their findings might be irrelevant…

I also have a feeling Amazon might be heading towards a PR shitstorm. According to a Reuters article today, “Cases of the virus have been reported among staff from more than 50 of Amazon’s U.S. warehouses, according to the New York Times. Amazon has 519 facilities in its U.S. distribution infrastructure, according to logistics consultancy MWPVL International Inc.” This information alone is not detrimental, but combined with workers complaining of unsafe conditions, there might be serious long-term consequences to this. No matter how much money they make during this pandemic, what would it do to their reputation if they become known as “the company that put employees’ lives at risk and put profits before their welfare in the midst of the Coronavirus pandemic”?

Of course, Amazon might change its ways over the coming days/weeks. Especially if workers start staying home instead of heading into work. But I’m curious as to what other people think about the current AMZN trend.