Amazon CFO Stepping Down

Updated from 4:24 p.m. EST

Just when Wall Street had finally quieted down about its numbers, Amazon.com (AMZN) made an announcement that will surely have investors speculating anew.

The big online bookseller said Tuesday that its financial chief, Warren Jenson, would step down later this year. Jenson, who has served as CFO at Amazon since September 1999, didn't specify a reason for leaving, saying only that "I took this position with the objective of working with Jeff and the management team to bring Amazon.com to profitability" and that "it's the appropriate time for me to move on to a new set of challenges."

The move seemed to take some Wall Streeters by surprise. "It's a little surprising, especially given the timing since they've done a lot of heavy lifting their over the past two years," says Steve Weinstein, who covers the company for Pacific Crest Securities. "He went through some tough times there." Weinstein has a market perform rating on the stock.

When Jenson arrived at Amazon in 1999 after leaving his CFO post at Delta Airlines, he immediately brought old economy credibility to the online upstart, say observers. He was generally well liked by the investment community, even if he was at times grilled about Amazon's disclosure practices. As the public face of the company at most investor conferences, Jenson was the one who addressed investors' concerns over the quality of the company's financial reporting --which at times investors and analysts felt was lacking.

Amazon, of course, has been among the most heavily scrutinized of the online businesses that came to market in the late 1990s. The company rode to a multibillion-dollar market valuation in the Internet boom despite generating huge losses, making it a target of critics of the so-called New Economy.

Since then, Amazon's stock has lost some 90% of its value amid a marketwide selloff, but the company actually managed to turn profitable in the latest quarter as growth revived in its core books, videos and music business. Still, some short-sellers have continued to complain that Amazon's books can be difficult to parse, and with the departure of the CFO some critics will surely speculate that the fourth quarter's strong showing was ephemeral.

Jenson will stay with Amazon for a few months to help recruit a successor, the company says. After falling 37 cents during regular trading, the stock dropped 74 cents, or 6.7%, in after-hours action to $15.37.

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