Why Amazon shares plummeted today

Why Amazon shares plummeted today - 6607071 04104032 who should sell on amazonAmazon (Amazon shares - ticker AMZN) is currently buying a large overseas business?

According to an article published on Monday morning, yes. The company is said to be among the various entities that are considering an offer for a unit of the large German retailer Metro based in India. Although the American company has very deep pockets, it could be an expensive purchase. At this point, investors ditched Amazon's shares, which fell more than 3% over the course of the day.

Will Amazon succeed in this new acquisition?

Citing "people familiar with the matter," Bloomberg said several large companies are vying for German company Metro's wholesale operations in India. According to sources, Thailand's Pokphand group and Indian conglomerate Reliance Industries are two such suitors. The third is Amazon.

Non-US companies are apparently further ahead in the pursuit of Metro's businesses. Bloomberg said Pokphand and Reliance have both made non-binding offers for the unit. At the moment, according to the article, Amazon is "considering" making an offer.

Sources in the report say the Metro unit could be worth the equivalent of $ 1 billion to $ 1,2 billion. It is unclear how much Pokphand and Reliance could offer with their offerings.

Metro has yet to comment on the report, as have none of the alleged suitors cited in the article, including Amazon.

Metro could also be bought, but ...

At this price, the Metro unit would be a mere drop in the bucket for Amazon financially - after all, it had more than $ 36 billion in cash at the end of March.

However, $ 1 billion is a substantial amount, and investors may fear that the money could be better used in other ways. While the company is a dominant retailer in the US and has a very good (and somewhat hidden) business unit of Amazon Web Services, both segments are highly competitive and will certainly be in the future.