The Little Numbers Betray Amazon, Too

Amazon.com's (AMZN Quote) second-quarter earnings report Monday evening gave Wall Street plenty of numbers to look at.

But as the stock plunged Tuesday, some observers were talking more about the figures that the company wasn't playing up.

Though Amazon's reduced revenue guidance grabbed the headlines, investors were equally unnerved by the company's crumbling customer base and the possibility that it could face tightening credit terms from vendors. With the economy suffering through a slump and growth at Amazon's profitable books unit slowing to a crawl, those fears are quite real, observers say. Investors agreed, sending the stock down $3.97, or 24%, to $12.06 Tuesday.

Down Low Next to the Base

First, take the company's customer base, which has long been considered one of Amazon's most valuable assets. For the 12 months ended June 30, only about half of the company's 17 million active customers made purchases, noted Mark Rowen, an analyst at Prudential Securities who has highlighted the issue in past research reports. ...