Shares of Internet retailer
hit a new low Wednesday, as rumors circulated that large institutions were unloading the shares.
At one point the stock was off nearly 20% at $6.85; it recently traded at $7.79, off 80 cents, or 9.3%.
The drop caught many who follow the company off guard. "I'm mystified by it," says Eric Von der Porten of West Coast money management firm Leeward Investments, who owns put options on the stock, a bet that share prices will fall. "Maybe there's some news leaking out there, but maybe people just decided to sell."
The heavy volume in the stock -- nearly 17 million shares, nearly triple the daily average -- and the number of large block trades suggest that some large institutional shareholders may be selling. Legg Mason is the largest institutional shareholder in Amazon; no one at the firm was available to comment on its Amazon position.
"I just think there's some big guys bailing," says Shawne Milne, who covers the company for
Soundview Technology Group
. "From a fundamental perspective, there isn't anything terrible new."
In addition, some worry that July was a dismal month for Amazon. An Aug. 31 article in
The Wall Street Journal
reported that ComScore, a research firm that tracks sales at online retailers, estimates that Amazon's July sales fell 9% from the prior month, excluding international and services revenue.
Seattle-based Amazon has vowed to become profitable, on a limited basis, in the fourth quarter of 2001, a promise it reiterated even as it lowered revenue guidance in its
most recent quarterly report. Still, its shares have plunged more than 90% from their peak.