The FTC Could Call for an Amazon Breakup. Why Investors Should Celebrate.

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Amazon

It looks like he’s about to be hit with an antitrust lawsuit by the Federal Trade Commission. That’s not necessarily bad news for shareholders.

Amazon

(AMZN) has not filed a settlement with the FTC in what could be final talks before filing a lawsuit against the online retailer, according to The Wall Street Journal. reported, citing people familiar with the matter. The lawsuit may suggest steps that could lead to the company’s dissolution, according to the WSJ.

Amazon did not immediately respond to a request for comment on Wednesday.

Shareholders shouldn’t worry too much — they might even celebrate the news. That’s according to DA Davidson analysts, who calculated that Amazon could be worth between $148 and $193 a share if it splits.

The calculation is based on the fact that Amazon is divided into three parts – its own retail operation, third-party retail or market platform and cloud computing business. The analysts, led by Tom Forte, argued that it might be better off keeping Amazon as it is now, where it is struggling to maintain a premium price of 10%-20% compound annual growth rate.

Amazon shares were down 0.7% in premarket trading Wednesday at $136.37.

This isn’t the first time Amazon’s split has come up – Baron In the year In 2018, he wrote about the state of the odds. However, the FTC’s lawsuit may focus investors’ minds on what would happen if Amazon were forced to move, not by choice. Other analysts have pegged Amazon’s estimate at around $200.

Breaking up will not be an easy task. DA Davidson Fort suggested that the distraction period could last more than a decade, based on the already complex company break-up. However, he stated that both are Google-parent.

Alphabet

(GOOGL) and

Facebook

-Owner Meta Platforms (META) shares have underperformed following government antitrust charges.

Write to Adam Clark at [email protected]