During the campaign trail, Trump suggested that Amazon has a "huge anti-trust problem." Now that the election is over, Amazon's stock has notably sold off and is lower by more than 8 percent over the past four days alone.
Amazon's Selloff: 2 Sides To The Story
Bill Miller, LMM's chairman and chief investment officer was a guest on CNBC's "Squawk Box" on Tuesday to offer his take on the decline in Amazon's stock.
Miller noted that several high growth internet stocks, including Facebook Inc FB and Alphabet Inc GOOG GOOGL have all fallen in unison with Amazon since before the election results. However, he added that Amazon's stock has corrected more than other names, so this may reflect the added layer of uncertainty over a Trump administration.
Miller further suggested that he doesn't believe there are any anti-trust issues at Amazon, and it is up to the courts to reach such a conclusion. Nevertheless, this creates headline risk — and investors hate headline risk.
On the other hand, Miller argued that the declines seen in Amazon, Alphabet and Facebook's stocks have to do with a change in growth outlook.
"Growth is expected to be faster under Trump and therefore the scarcity of growth will be less," he said. "And so the biggest growth companies out there like Amazon, Facebook and Google which were the embodiment of growth — there is more competition now for those dollars."
Entry Point, Regardless
Nevertheless, Miller believes that the selloff in all three companies has created a compelling entry point for investors.
At last check, Amazon was up 2.86 percent on the day, trading at $739.62. The stock is down roughly 2 percent since the election.
Image Credit: By Max Goldberg [CC BY 2.0], via Wikimedia Commons© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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