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Amazon Has Been Quietly Positioning Itself To Become A Money Lender

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Amazon Has Been Quietly Positioning Itself To Become A Money Lender
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It is known that Amazon.com, Inc. (NASDAQ: AMZN) has plans to enter the furniture market and even the drug delivery market but quietly behind the scenes the online giant is preparing itself to enter the money lending space, Gadfly's Lisa Abramowicz reported.

Over the past two years, Amazon's executives have been active in conversations with banking regulators to discuss "financial innovation," Abramowicz discovered through lobbying disclosures. The e-commerce giant does already have a lending business to help merchants sell products on its marketplace but it may have bigger plans ahead.

Amazon could have one factor working in its favor, Abramowicz said. The number of commercial banks in the U.S. has been declining over the years at a time when regulators are more open to lending their support to financial innovation among nontraditional financial firms. Also, many of the names associated with online lending, like LendingClub Corp (NYSE: LC) don't have enough capital to make traction and have been plagued with leadership and credit issues.

This is where Amazon fits in and could drastically shake up the online lending space given its far superior access to capital. Finally, the company could also leverage its trove of consumer data and then implement its traditional business plan of sacrificing margins at the expense of gaining market share in a new space.

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DateFirmActionFromTo
Feb 2019Pivotal ResearchInitiates Coverage OnBuy
Feb 2019Raymond JamesMaintainsOutperformOutperform
Feb 2019Deutsche BankMaintainsBuyBuy

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Posted-In: Gadfly Lisa AbrAnalyst Color Analyst Ratings Media Best of Benzinga

 

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