Question

Explain how Covid-19 has done the following:

decreased stock price and/or viability of Amazon. (essay question)

Answer 1

Amazon is a major E-commerce player. After the Corona virus lockdown all across the globe, delivery of goods has been restricted only to essential items. Due to the restrictions on delivering goods, Amazon has suffered huge losses of revenue and profits while the costs remain the same as the fixed costs and employee salary need to be covered even while the lockdown is going on. This has majorly impacted the profitability and hence the stock prices have fallen. Investors also do not see the situation improving anytime in the short run. Covid -19 pandemic has imposed massive restrictions on human activity and we do not see the economy recovering any time sooner, due to which the demand of the consumers will also fall as people have less disposable income in hand due to job cuts and massive unemployment. Economy has been slowing and recovery shall be slow, all this has impacted the stock prices and viability of Amazon.