Amazon shares soar, orbit Earth ahead of retiring boss Bezos as JEDI falls
WASHINGTON – Post-holiday US market action pinned the three major averages in negative territory, where shares remain as of 2:30 p.m. ET. But Amazon shares (NASDAQ:AMZN) have already beaten soon-to-be ex-boss Jeff Bezos into earth orbit. Reasons why? High on the list: Investors’ fervor for any company seen to be leading in commercial space travel. But perhaps even more important, near-term: The Pentagon just threw up its hands and decided to cancel the huge and hugely controversial JEDI cloud contract. It had earlier pulled that contract from Amazon, awarding it instead to competitor Microsoft (NASDAQ:MSFT).
(Below: YouTube video of recent Blue Origin test flight.)
Amazon wins. Then loses. Then wins again, as Amazon shares soar Tuesday
Explanation. The DoD had originally awarded a big $10 billion cloud-computing contract known as JEDI (Joint Enterprise Defense Infrastructure to Amazon). But then, in a controversial response to a challenge by losing bidder Microsoft, the Pentagon pulled the award from Amazon and gave it to Microsoft. Bezos, of course, filed a protest – actually, a common practice in The Swamp. And the upshot is that DoD has now dropped the whole cloud-modernization deal.
Look for the government’s RFP (Request for Proposal) for this work to head for rewrite, to be bid out once again at a future date. Politics involved? More than likely. But politics is often deeply involved in huge contract awards like this one. Don’t miss the next thrilling episode.
How long will Amazon shares remain in orbit?
Meanwhile, back on Wall Street, between the Amazon Blue Origin space shot speculation and today’s news that Amazon could potentially be back in the running for Son of JEDI, Amazon’s already hugely expensive shares remain in orbit today. Having closed last Friday at the already whopping price of $3,510.98 per share, Amazon shares have already soared as high as $3,769 per share. They current stand up nearly 4.75% on the day, or roughly $165 per share. And change.
As we write today’s article, Amazon shares hover at around $3,674 as they jostle around many times per second on substantial volume.
Buy, sell or hold Amazon shares?
The big question for investors already in these shares today: Should I sell what I have and take the profit? Or should I let my shares ride. Reality tells us that the shares may very likely begin to slide as we approach today’s 4 p.m. ET close, and may continue the slide tomorrow. Simple profit taking would be the major reason.
We’re in this dilemma ourselves, owning only a few of these costly shares. And we still haven’t made up our minds as the clock ticks. Do we take the risk and hold on? Greed is good. But that’s only good until investors outfox themselves with an overabundant supply of optimism. On the other hand, dumping the shares right now ahead of a potential plunge could provide an opportunity to buy them back at a lower price once the Newtonian action in the shares concludes.
Problem is, it’s a crap shoot right now. It’s always a nice situation to be in. But making the wrong move can have you kicking yourself in the keister for the rest of your life. At least we live in interesting times, eh?
While AMZN may be soaring, Wall Street’s averages continue to tank in post-holiday sell-off
The rest of the market is actually pretty gloomy. Now convinced that interest rates really aren’t going to rise anytime soon, banks, mortgage REITs, government bonds and other investments that make more money when interest rates rise are getting clobbered. Ditto, oil and gas stocks, given that the remnants of OPEC haven’t agreed on widely expected production agreements.
These events, in turn, likely led to profit taking today. But will they lead to more selling tomorrow? No one knows, even though the usual Wall Street touts selling their books on CNBC claim they know all, see all.
Anyhow, today feels great for Amazon investors. But not so great from those heavily invested in other sectors. Or in JEDI loser Microsoft, whose shares are down 0.5% (-$1.38 per share) at the moment.
For a broader picture, the Dow is currently off 273+ points for a 0.8% loss on the day. The tech-heavy NASDAQ continues its recent weakness, though not by much. It’s down a mere 0.08% thus far. And the broader-based S&P 500 currently trades off -0.41%, just because.
Our chart indicators this evening might give us a clearer picture of the current market’s potential July trend. We plan to comment on this trend in tomorrow’s column.