Why Amazon's Nike Deal Took $1 Billion Out of Other Retailers

Due to the increase in Amazon's stock as a result of its latest acquisitions, they are essentially self-financing: the rise in value more than offsetting the cost of the companies purchased.

How do you compete with that? JL

Rani Molla reports in Re/code:

J.C. Penney and Foot Locker saw the biggest single-day declines at about 6 percent and 5 percent, respectively. Nike, on the other hand, saw its stock increase 2 percent. Amazon is the clear winner in all these deals. Since last week it has gained $18 billion in market cap — or over $4 billion more than it needed to buy Whole Foods.

Amazon is in the business of everything and is one of the biggest companies in the world. When it makes moves, retailers feel it.

News yesterday that Nike would be selling its sneakers directly through Amazon wreaked havoc on other sporting retailers. Competing sports businesses have lost over $1 billion in market value in just one day as the stock market reckons how badly the deal might affect other major Nike sellers.

J.C. Penney and Foot Locker saw the biggest single-day declines at about 6 percent and 5 percent, respectively. Nike, on the other hand, saw its stock increase 2 percent.

Amazon’s announcement last week that it was acquiring Whole Foods was a much steeper — and still lasting — shock to supermarket values. Supermarket rivals have maintained a combined market loss of over $21 billion since last Friday.

Amazon is the clear winner in all these deals. Since last week it has gained $18 billion in market cap — or over $4 billion more than it needed to buy Whole Foods.