The Morning Brief: Amazon.com Earnings Get Mixed Reviews
Investors initially sold the stock but one investment bank raised its price target.
Was Amazon.com’s earnings report Thursday night good or bad? Well, it all depends upon whom you ask. Investors’ initial reaction does not appear encouraging. Shares of the e-commerce giant fell about 2.5 percent to close at $1020.04 after second-quarter operating income came in 40 percent below consensus forecasts. This is finally good news for David Einhorn’s Greenlight Capital, which has been famously shorting Amazon.com among other stocks in its so-called “bubble basket.”
But at least one investment bank is not discouraged. Barclays raised its price target on the stock to $1150, from $1120, and maintained the stock’s status as a “top pick.” The bank says the most important metric in the report was retail subscription revenue, which shows optimum prime membership accelerated year-over-year. Barclays also asserts that the cloud business was the bright spot again, exceeding estimates. Barclays does couch this optimism, conceding to clients the shares “are due for a temporary pause.” The bank added it would “selectively add to positions.”
Moore Capital Management’s Louis Bacon has shelled out $8 million for a penthouse in a pricey, prestigious Park Avenue building and is awaiting word on a $14 million offer to buy another apartment, according to the New York Post. If approved, he plans to combine the two penthouses. The apartments at 888 Park Ave. are in the same building that Carolina Kennedy calls home. Through July 6, Moore Global Investments, the macro fund Bacon manages, was down 2.6 percent for the year. Moore Macro Managers was off 2.1 percent. Both funds have posted low- to mid-single-digit gains in each of the three previous years.
Senator Investment Group disclosed that as of July 17, it owned 2.28 million shares of Hyatt Hotels Corp., or 5.82 percent of the lodging giant. The investment is passive. The hedge fund firm did not own any shares of Hyatt at the end of the first quarter. We won’t know its second quarter holdings for another two weeks.