“For the first time since 2015, Amazon has reported a loss in its first quarter,” Scorch shared with Orak, Verum, and Felix.
“Amazon is an e-commerce company. Electronic commerce or e-commerce is buying and selling goods or services over the Internet,” Scorch explained, “A company’s financial year is divided into four three-month periods. They are known as quarters. The first three months of the year are the first quarter.”
“Oh, why did Amazon suffer a loss?” Felix said.
“I thought it was doing good. Most companies suffered losses during the Covid-19 pandemic. But Amazon’s business had increased due to online sales,” Verum added.
“You are right. But now its online sales have decreased by 3%. It also suffered a fall in the value of its shares in the electric vehicle company Rivian,” Scorch said, “Electric vehicles run on electric power.”
Scorch continued, “Shares are units of ownership in a company. They are bought and sold in the share market. In 2019, Amazon invested in Rivian. It owns almost 20% of the company. But the company’s price of the shares decreased by half. Amazon lost a total of $7.6 billion because of Rivian.”
“How much loss did Amazon report?” Felix said.
“Amazon reported a loss of $3.8 billion in its first quarter,” Scorch answered.
“There are many other factors for the reported loss,” Scorch added, “There’s a war going on in Ukraine. There are many supply chain issues in the world. Therefore, the costs have increased.
Many other technology companies such as Facebook, Apple, and streaming service Netflix are also facing similar revenue problems.”