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Why is the Q3 stock of Amazon undervalued in 2020

AMZN stock had seen a rise in its share from 2018 and were expecting the same in the year 2020 due to this Covid 19 pandemic every warehouse and all the operations of Amazon had to be shut down as they were considered as non-essential.

Investors thought that the rise in Amazons stock about this much means that it is going to be profitable for them, so they invested more amount of money before 2020 and then came the great decline due to pandemic and the price of the stock fell very rapidly which had meant a loss to the investors.

Household and other things are not affected

Due to this pandemic, Amazon had to face loses and because it was shut down in the various country for almost a period of 2 – 3 months due to the pandemic and also because many workers were getting Covid 19 positive report from their test.

Then after Amazon opening, the customers gave such a great response that it gained a lot of money after it had reopened and saw a great increase in its sales and also its stock price.

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In about some days within reopening, it reached about the 33% tag line of the number of shares already. Yet the amount of stock money is paid to the shareholders after the earnings have been made by the company.

Why is Amazon paying off after earning

This is due to the reason that Amazon had made more money and its stock prices were going up, but there is a saying that the more the market rises, the harder and heavier it falls when it declines.

So after the sudden fall in the stock price of Amazon they wanted to earn some money first after opening and then paying off their investors as an extra security measure so that they don’t pay all their savings to the shareholder and don’t have any money to research on their new products.

Amazons marketing opportunity

During the period of 2018, Amazon saw a huge increase in its income when they advertised about all the different products which were either newly brought or were already present.

Due to these marketing strategies, customers used to click on the advertising which would divert them to Amazon’s website where they can check the price of all the products which they saw on the advertisement on the home page.

Many people used to buy these products as a result to which it saw an incredible rise in its income in 2018. You can get more information from AMZN news.

Categories: Business