AMZN - Amazon.com, Inc.

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
1,781.60
-12.56 (-0.70%)
As of 11:47AM EDT. Market open.
Stock chart is not supported by your current browser
Previous Close 1,794.16
Open 1,777.00
Bid 1,775.53 x 1100
Ask 1,776.53 x 900
Day's Range 1,767.46 - 1,783.62
52 Week Range 1,307.00 - 2,035.80
Volume 1,591,255
Avg. Volume 3,268,533
Market Cap 881.279B
Beta (3Y Monthly) 1.62
PE Ratio (TTM) 73.91
EPS (TTM) 24.10
Earnings Date Oct 23, 2019 - Oct 28, 2019
Forward Dividend & Yield N/A (N/A)
Ex-Dividend Date N/A
1y Target Est 2,303.14
Trade prices are not sourced from all markets
  • MarketWatch

    Amazon stock falls after Morgan Stanley cuts price target

    Shares of Amazon.com Inc. slumped 1% in morning trading Monday, after Morgan Stanley cut its price target by over 4%, citing expectations that the e-commerce giant's expansion of one-day shipping will lower merchandise margins by raising costs. The stock is underperforming the broader market by a wide margin, as the Nasdaq Composite slips 0.2% and the Dow Jones Industrial Average eases 6 points, or less than 0.1%. Analyst Brian Nowak reiterated his overweight rating but lowered his stock price target to $2,200 from $2,300, but that is still about 24% above current levels. Nowak said that while one-day shipping is driving demand and revenue acceleration, he expects lower average order values pressuring company-wide merchandise margins. Nowak said for the second quarter, his research indicates one-day shipping costs per unit were 2.2-times higher than average shipping costs per unit, fulfillment costs were 2.0-times higher and average order values (AOVs) were 65% lower. He believes the lower AOVs are likely because one-day shipping has boosted orders of consumables.

  • The Zacks Analyst Blog Highlights: Netflix, Amazon, Comcast, Disney and Apple
    Zacks

    The Zacks Analyst Blog Highlights: Netflix, Amazon, Comcast, Disney and Apple

    The Zacks Analyst Blog Highlights: Netflix, Amazon, Comcast, Disney and Apple

  • Shopify Stock Fell for Six Straight Days: What’s Next?
    Market Realist

    Shopify Stock Fell for Six Straight Days: What’s Next?

    Shopify stock has fallen nearly 11% in the last six days. SHOP is trending down in today's premarket trading and is down 0.73% at 8:56 AM EDT.

  • Even Oil Majors Are Making Green Pledges: Climate Week Update
    Bloomberg

    Even Oil Majors Are Making Green Pledges: Climate Week Update

    (Bloomberg) -- Climate Week is underway. That means some the globe’s most powerful corporate leaders are making pledges to be greener as heads of state gather in New York to discuss ways to stop the planet from warming.The main event is at United Nations headquarters in Manhattan, where German Chancellor Angela Merkel, Indian Prime Minister Narendra Modi, Allianz SE Chief Executive Officer Oliver Baete and dozens of others are taking to the dais. On the other side of town, Climate Week’s opening ceremony features California Governor Gavin Newsom, Denmark Prime Minister Mette Frederiksen and others. More than 150 other events will follow across New York over the next five days.Read More: World Leaders Gather in New York as Global Climate Protests GrowEven Oil Majors Are Making Climate-Week Pledges (10:30 a.m.)The pledges from companies to cut carbon continue to roll in. Amazon.com Inc. announced it will order 100,000 electric delivery vehicles as part of a plan to go carbon-neutral by 2040. AT&T Inc. announced deals with Invenergy LLC and Duke Energy Corp. to buy more wind and solar energy. And Schneider Electric SE, the global supplier of electrical equipment, is moving up its goal to become carbon neutral by 2025, five years ahead of schedule.Even fossil fuel companies are getting in on the act. A coalition of 13 oil and gas companies including BP Plc, Chevron Corp. and Exxon Mobil Corp. announced an initiative to“unlock large-scale investment” in technology that would capture and trap global-warming causing gases in support of the Paris Agreement.Heads of State Call for Action, Newsom Blasts Trump (9:30 a.m.)At the opening ceremony of Climate Week in New York, heads of state and local government leaders are calling for immediate action. The loudest applause so far went to California Governor Gavin Newsom, who lashed out at U.S. President Donald Trump for rolling back environmental regulations and promoting use of fossil fuels that cause climate change.“I don’t know what the hell happened to our country that we have the president that we have in this issue,” Newsom said. “I’m absolutely humiliated.”Pension Fund Pledge to Make Portfolios Carbon-Free (9:00 a.m.)A coalition of pension funds including Allianz SE and Swiss RE AG have pledged to make their investment portfolios climate neutral by 2050. Combined, the companies have more than $2.4 trillion in investments, the group said in a statement.“Mitigating climate change is the challenge of our lifetime,” Oliver Bate, Allianz’s chief executive officer, said in a statement. “Politics, business and societies across the globe need to act as one to rapidly reduce climate emissions.”To contact the reporters on this story: Nic Querolo in New York at jquerolo1@bloomberg.net;Christopher Martin in New York at cmartin11@bloomberg.net;Will Wade in New York at wwade4@bloomberg.netTo contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Joe RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Barrons.com

    An Obscure Post Office Meeting Begins Today. It Has High Stakes for UPS, Amazon, and Holiday Shoppers

    The U.S. is pressing for changes to the Universal Postal Union. It’s, er, part and parcel of the Trump administration’s push to level the playing field for trade with China.

  • Netflix CEO Recognizes Competitive Threat, Stock Takes a Hit
    Zacks

    Netflix CEO Recognizes Competitive Threat, Stock Takes a Hit

    Netflix (NFLX) has been the worst-performing FAANG stock, primarily due to slowing growth amid rising competition in the streaming space.

  • Stock Market Drifts Lower, As Dow Jones Lags; Amazon Price Target Cut
    Investor's Business Daily

    Stock Market Drifts Lower, As Dow Jones Lags; Amazon Price Target Cut

    The Dow Jones industrials fell more than 50 points in today's stock market. Amazon was under pressure after a price target cut.

  • STMP vs. AMZN: Which Stock Should Value Investors Buy Now?
    Zacks

    STMP vs. AMZN: Which Stock Should Value Investors Buy Now?

    STMP vs. AMZN: Which Stock Is the Better Value Option?

  • 3 Discount Retailers Look Awesome Ahead of Holiday Season
    Zacks

    3 Discount Retailers Look Awesome Ahead of Holiday Season

    We are into that part of the year when bargain hunters are prowling the streets for great deals. And with only couple of months left for the festivities to begin, discount retailers must be on the verge of finishing the ground work.

  • Bloomberg

    World Leaders Gather in New York as Global Climate Protests Grow

    (Bloomberg) -- Heads of state from France to India are gathering in New York this week along with some of the world’s top corporate leaders for a climate summit as protests demanding curbs in carbon emissions expand across the globe.The annual Climate Week event is beginning Monday, ahead of a summit hosted by UN Secretary-General Antonio Guterres later in the day. Attendees include German Chancellor Angela Merkel, Indian Prime Minister Narendra Modi and France’s Emmanuel Macron. U.S. President Donald Trump, who announced he would withdraw from the Paris climate accord, and Brazilian President Jair Bolsonaro, whose country contains a huge swath of the Amazon forest, are skipping the gathering.The event follows Friday’s global protests demanding action on climate change, with tens of thousands of people participating in a movement backed by 16-year-old environmental activist Greta Thunberg. Students skipped school, and workers walked off jobs to participate in rallies from Sydney to Warsaw and New York. They want governments to treat global warming as an emergency, slash subsidies for fossil fuels and switch to 100% renewable energy.In Berlin, the demonstrators gathered just as the German government hammered out a $60 billion climate-protection package. The plan, worth more than the nation’s 2009 economic stimulus plan following the financial crisis, gradually increases automotive fuel prices and taxes air travel, while cutting costs for trains. It also introduces carbon allowances for transportation and provides incentives for people to junk old furnaces.Not a SnubMeanwhile, Trump -- who has worked to roll back restrictions on everything from vehicle to power plant emissions -- said his absence from the UN summit this week isn’t intended as a snub. He pointed out that he’s being briefed on catastrophic flooding in the Houston area.UN Secretary-General Guterres said he believes the U.S. can still pull its weight on climate change, even though Trump will be absent at the New York event. Cities and businesses are helping fill part of the void left by national governments on climate issues, according to the UN chief.He is pushing countries to raise their commitments to wean the world away from fossil fuels and said on Friday he expects an “impressive” number of leaders to announce commitments during the summit to achieve carbon neutrality by 2050.The climate event will take place as the UN General Assembly also convenes this week, and Brazil’s Bolsonaro plans to use his speech on Tuesday to punch back at critics who say he doesn’t care about the environment, while asserting his nation’s sovereignty over the Amazon rain forest. He got into a a trans-Atlantic feud last month with France’s Macron amid a flurry of reports about the burning Amazon.Company PledgesIn the lead-up to the UN gathering, several large companies and cities announced voluntary efforts to deal with climate change. Amazon.com Inc. founder and Chief Executive Officer Jeff Bezos this month announced a plan to meet the goals of the Paris agreement 10 years early, while more than 500 investors called on governments to take more action to combat climate change.Other speakers at the New York events this week include Oliver Baete, chief executive officer of insurance giant Allianz SE; Henrik Poulsen, CEO of Orsted A/S, the world’s largest offshore wind developer; and Unilever NV CEO Alan Jope.\--With assistance from Nic Querolo and Joe Ryan.To contact the reporter on this story: Pratish Narayanan in New York at pnarayanan9@bloomberg.netTo contact the editors responsible for this story: Tina Davis at tinadavis@bloomberg.net, Pratish Narayanan, Joe RyanFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Apple May Get Clues About Its Chances of Winning Tax Case of the Century
    Bloomberg

    Apple May Get Clues About Its Chances of Winning Tax Case of the Century

    (Bloomberg) -- Apple Inc. may only need to wait until Tuesday to get early clues about its chances of success in the biggest tax case in recent history.The iPhone maker has been arguing its case at the European Union’s General Court to topple a record 13 billion-euro ($14.3 billion) EU tax order. This week the same panel of judges will deliver a ruling on two smaller but related challenges by Starbucks Corp. and a Fiat Chrysler Automobiles NV unit.They’re the first in a series of cases to come to a decision as companies rail against EU Competition chief Margrethe Vestager’s five-year crackdown on allegedly unfair tax deals.While the facts of the various appeals differ, Tuesday’s decisions “should have a far-reaching impact, both on the other pending cases and going forward,” said Howard Liebman, a tax partner at law firm Jones Day in Brussels, who isn’t involved in the disputes.The judges’ stance will “presumably establish some precedent as to how far the court is willing to allow the commission to extend its approach of judging tax regimes -– and individual tax rulings –- in the context of a state-aids analysis,” he said.Vestager’s ProbesAppeals have been piling up at the EU courts since state-aid investigators started work in 2013 to unearth what they deem to be the most problematic examples of otherwise legal individual tax agreements doled out to companies by countries. The judges’ verdicts could empower or halt Vestager’s probes, which are now centering on fiscal deals done by Amazon.com Inc. and Alphabet Inc.Starbucks and Fiat were targeted on the same day in 2015 by a similar EU order to pay back about 30 million euros each over their tax arrangements in the Netherlands and Luxembourg respectively.The commission accused Luxembourg and the Netherlands of granting so-called tax rulings to the companies that backed “artificial and complex methods” to calculate their taxable profits that didn’t reflect “economic reality.”The EU said at the time the companies did this by setting prices for products and services sold between units -- called transfer prices -- that didn’t reflect market conditions.“As a result, most of the profits of Starbucks’ coffee roasting company are shifted abroad, where they are also not taxed, and Fiat’s financing company only paid taxes on underestimated profits,” said in a 2015 statement.Back TaxesLuxembourg has since also been ordered to recoup 250 million euros from Amazon.com and 120 million euros in back taxes from energy utility Engie SA, France’s former natural-gas monopoly, previously known as GDF Suez.In the Apple case, the EU said Ireland illegally slashed the iPhone maker’s tax bill between 2003-2014, a finding the company and Irish officials don’t accept.The EU alleged that “Apple paid essentially no tax on earnings in Europe” and “sought headlines by quoting tiny numbers, but this public campaign ignores the taxes Apple pays all across the world,” Apple attorney Daniel Beard said at last week’s hearing.The Dutch finance ministry said it had nothing to add to previous statements criticizing the EU’s approach. Fiat Chrysler, Starbucks, Apple and the commission declined to comment, as did the Luxembourg and Irish finance ministries. EU nations ordered to claw back the allegedly illegal tax aid have accused the commission of overreaching itself by using state aid law to attack individual fiscal arrangements that dated back many years. A key question for the commission in the cases is whether its argument that these tax rulings were selective and unfair stands up in court.“The commission did not identify a single instance where a taxpayer was treated less favorably than Apple,” Paul Gallagher, a lawyer for Ireland, told the judges in the court hearings last week.Luxembourg, which has so far faced the brunt of the EU’s decisions, has attacked the “arbitrary nature” of the commission’s approach which creates “complete legal uncertainty,” their lawyer Denis Waelbroeck said in a court hearing about Fiat’s case last year. Ireland and Luxembourg have supported each other in their respective appeals.The nation was among the first EU countries to be singled out in 2014 over its tax practices, when a group of investigative reporters published thousands of pages from secret arrangements between the tiny nation and companies including Walt Disney Co., Microsoft Corp.’s Skype and PepsiCo Inc. The so-called LuxLeaks publications have been used by EU regulators in their deliberations and EU officials further expanded their probes by seeking new information to find more “outliers” among these tax deals.Still, in a first in the EU’s continued crackdown on “outliers” among these otherwise legal tax rulings, the commission last year closed its probe into the fiscal deal between McDonald’s Corp. and Luxembourg, finding there was no violation of state aid laws.The cases are T-636/16 - Starbucks and Starbucks Manufacturing Emea v. Commission, T-755/15 - Luxembourg v. Commission, T-759/15 - Fiat Chrysler Finance Europe v. Commission, T-760/15 - Netherlands v. Commission,(Updates with more on Luxleaks revelations and McDonald’s probe in last two paragraphs.)\--With assistance from Peter Flanagan, Daniele Lepido and Ruben Munsterman.To contact the reporter on this story: Stephanie Bodoni in Luxembourg at sbodoni@bloomberg.netTo contact the editor responsible for this story: Anthony Aarons at aaarons@bloomberg.netFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Amazon’s ‘Fleabag’ and ‘Mrs. Maisel’ are  Emmy winners
    MarketWatch

    Amazon’s ‘Fleabag’ and ‘Mrs. Maisel’ are Emmy winners

    Amazon scored multiple early victories at the 71st Emmy Awards Sunday night, with wins for comedies “The Marvelous Mrs. Maisel ” and “Fleabag.”

  • Bloomberg

    Uber Ex-CEO Kalanick Grabs Slice of India’s Cloud Kitchen Arena

    (Bloomberg) -- Uber Technologies Inc. co-founder Travis Kalanick has invested in India’s largest shared-kitchen company, a person familiar with the matter said, taking his second act in business to one of the world’s fastest-growing internet arenas.Kalanick’s real estate company, City Storage Systems, bought a small stake in Rebel Foods Pvt as part of a previously disclosed $125 million round of funding, the person said, asking not to be identified talking about a private deal. The entrepreneur has taken a slice of a business valued at $525 million that delivers butter chicken and paneer-topped pizzas to millions of Indians, backed by big-name investors from Coatue Management and Goldman Sachs to Sequoia Capital and ride-hailing giant Gojek. Rebel Foods is now expanding beyond its home turf and into Southeast Asia and the Middle East.Cloud kitchens, much like cloud computing services, have become a popular business model for food-delivery providers that want to serve up meals while skirting the expense of traditional restaurants with their associated high real estate and service staff costs. Food is prepared through a network of tightly-packed kitchen spaces in affordable locations, far from the bustling high streets that restaurant brands favor.Read more: Uber, Travis Kalanick in Business Again. This Time, as RivalsKalanick, who was ousted in 2017 from the U.S. ride-hailing leader he co-founded after a series of scandals, is making his first investment in India. Since that dramatic exit, Kalanick has set up an investment fund and charted a strategy to build a kitchen rental service -- called CloudKitchens -- through CSS. A spokesman for Rebel Foods declined to comment. A representative for a Singaporean unit of CSS didn’t have an immediate comment when contacted.Kalanick’s involvement is a boost for Rebel. He took a startup with a small fleet of black cabs in his San Francisco base and turned it into a global ride-hailing leader before getting into meal delivery. Mumbai-headquartered Rebel, founded by McKinsey & Co. alumnus Jaydeep Barman, serves a wide menu through “virtual restaurants” that, as far as consumers are concerned, exist only on the internet.Read more: McKinsey Alum Turns Failed Restaurant Into $535 Million StartupRebel’s own menu ranges from fragrant biryani and cottage cheese (paneer) pizzas to a hundred variations of dosa, southern India’s lentil-and-rice crepe. It operates more than 250 cloud kitchens in 22 Indian cities, and plans to expand to 400 by the year ending in March 2020, founder Barman told Bloomberg previously.The startup however operates in a crowded space, particularly in India where delivery company Swiggy, backed by Naspers and Tencent Holdings Ltd., is also building its own virtual cooking network. Uber already delivers from a chain of so-called ghost kitchens, while Amazon.com Inc. is reportedly scoping out its own cloud kitchen and food delivery strategy.\--With assistance from Yoolim Lee.To contact the reporter on this story: Saritha Rai in Bangalore at srai33@bloomberg.netTo contact the editors responsible for this story: Arijit Ghosh at aghosh@bloomberg.net, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • Investing.com

    Stocks - Wall Street Treads Water on Trade, Global Growth Concerns

    Investing.com – Wall Street was slightly lower as investors stayed cautious amid a lack of progress in U.S.-China trade talks, while slowing growth in Europe increased worries about a global recession.

  • Taking Another Swing at a Possible Amazon Trade
    TheStreet.com

    Taking Another Swing at a Possible Amazon Trade

    It is do-or die-time for Amazon.com Inc. . In August I saw a time/price decision in Amazon where the low was made on top of a large price projection from a prior declining swing of $292.40. When I discussed the possibilities that if the larger pattern in this stock was to play out similar to the prior pattern, the upside target would be 1.272 of the full swing into the August lows.

  • Fed Caught Off-Guard, China's Troubles, Trading Amazon: Market Recon
    TheStreet.com

    Fed Caught Off-Guard, China's Troubles, Trading Amazon: Market Recon

    The fact is that there are several highly significant barriers with China still to be satisfactorily addressed before any real progress might be realized.

  • Investing.com

    Stocks - U.S. Futures Flat After Chines Officials Break Off Extended U.S. Trip

    Investing.com - U.S. futures were flat on Monday, after Chinese officials cut their U.S. trip short and speculation remained on whether or not the two largest economies in the world will reach a trade deal in the coming months.

  • Bloomberg

    Google Will Listen to Your Conversations Again, But Ask First

    (Bloomberg) -- Google workers will listen to audio snippets of people speaking to its digital voice assistant to help improve the product’s quality -- if users give the company permission to do so.Alphabet Inc.’s Google paused all human review of assistant audio in July after a Dutch contractor leaked some clips to a journalist, who was then able to identify specific people on the recordings. On Monday, Google said it’s bringing back human reviewers, but adding a new set of precautions to protect customers’ privacy.Google and other companies like Amazon.com Inc. use human transcription to check machine translators and make them smarter. The practice is widespread, but has made some users nervous that giant corporations are monitoring them. The companies maintain that audio snippets aren’t linked to personally identifiable information.Under the new Google policy, the company will tell users that their audio may be listened to if they opt in to a feature that also improves audio quality, Nino Tasca, a senior product manager on Google’s Assistant team, said in a blog post. The company also is trying to more accurately recognize audio that was captured accidentally. Usually, the assistant only listens when a person says, “Hey, Google,” but occasionally the computer might misinterpret something else as that “wake word” and begin listening when the customer isn’t aware.“We believe in putting you in control of your data, and we always work to keep it safe. We’re committed to being transparent about how our settings work so you can decide what works best for you,” the company said in a blog post.Google also said users can view their past interactions with the voice assistant and delete any of them at any time.To contact the reporter on this story: Gerrit De Vynck in New York at gdevynck@bloomberg.netTo contact the editors responsible for this story: Jillian Ward at jward56@bloomberg.net, Andrew Pollack, Mark MilianFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • TheStreet.com

    Netflix Loses Top Emmy Awards Haul to AT&T-Owned HBO, Amazon Closes Gap

    The online streaming and production company loses its place as overall winner in this year's Emmy Awards as larger media and tech companies continue to challenge its market dominance.

  • Amazon Dominates Comedy Emmys With ‘Fleabag’ and ‘Maisel’
    Bloomberg

    Amazon Dominates Comedy Emmys With ‘Fleabag’ and ‘Maisel’

    (Bloomberg) -- Amazon.com Inc.’s “Fleabag” and “The Marvelous Mrs. Maisel” pulled off a near-sweep of the comedy Emmys awarded on Sunday night, cementing the company’s status as an outlet for high-brow humor.“Maisel,” a show about a New York housewife turned standup comic, picked up statuettes for best supporting actor and actress. “Fleabag,” a dark comedy about a young British woman struggling to get her life together, won for writing, directing, best actress and best comedy.Bill Hader, the star of HBO’s “Barry,” also snagged a comedy Emmy for acting at the awards, which Fox broadcast live from Los Angeles. The TV academy aped the film academy in staging an awards show without a formal host, though it did have an announcer providing sports-style running commentary.With media giants rushing to introduce new streaming platforms, Amazon has sought to build a reputation for high-quality original shows. It’s going to get harder to stand out. Walt Disney Co., Apple Inc., AT&T Inc.’s WarnerMedia and Comcast Corp.’s NBCUniversal will all roll out their services in coming months, setting up a historic fight for viewers’ eyeballs and wallets.Disney planted a flag early in the show with a commercial for its Disney+ streaming service, calling out its ownership of hit machines like Star Wars, Marvel and Pixar.Phoebe Waller-Bridge, the “Fleabag” creator, was nominated for best comedy and as well as best drama, for “Killing Eve.” That gave her a chance to match an accomplishment attained by prolific producer David E. Kelley in 1999, but the drama award went to “Game of Thrones.”“Maisel” also won five Emmys last year. “Saturday Night Live,” meanwhile, took this year’s Emmys for a variety sketch series.(Updates with best comedy Emmy in second paragraph)To contact the reporter on this story: Lucas Shaw in Los Angeles at lshaw31@bloomberg.netTo contact the editors responsible for this story: Nick Turner at nturner7@bloomberg.net, Virginia Van NattaFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.

  • How Amazon’s Twitch Platform Makes Money
    Investopedia

    How Amazon’s Twitch Platform Makes Money

    Twitch may just be Amazon’s best-kept secret. Here is how the esports streaming service makes money. Acquired in a 2014 bidding war with Google for $1 billion in cash, the gaming platform, and the social network continues to break its own high scores.

  • Ahead of UN climate summit, Google, Amazon, IKEA pledge environmental initiatives
    Quartz

    Ahead of UN climate summit, Google, Amazon, IKEA pledge environmental initiatives

    Ahead of the United Nations Climate Action Summit on Sept. 22, multinational companies are committing to using renewable energy at record levels. IKEA and Google are two of the organizations that have pledged major renewable energy initiatives in recent days. Amazon and other companies have vowed to adhere to the Paris climate change accord goals well ahead of schedule.

  • Reuters

    UPDATE 2-Billy Porter, 'Game of Thrones' stars arrive for television's Emmys

    LOS ANGELES, Sept 22 (Reuters) - "Pose" star Billy Porter, sporting a crystal-studded black suit and an enormous hat, along with "Games of Thrones" stars Peter Dinklage, Maisie Williams and Gwendoline Christie were among early arrivals for television's Emmy awards on Sunday, where HBO's medieval fantasy series aims to crown its final season with a fourth best drama series statuette. Director Ava DuVernay and the five men known as the Central Park Five, whose wrongful arrests in New York three decades ago are dramatized in the Emmy-nominated "When They See Us," also walked the purple carpet in Los Angeles, along with "The Marvelous Mrs Maisel" lead actress Rachel Brosnahan.

  • China's Wealth Fund Is Diving Into a Crowded Pool
    Bloomberg

    China's Wealth Fund Is Diving Into a Crowded Pool

    (Bloomberg Opinion) -- The world’s second-largest sovereign wealth fund is playing a dangerous game.China Investment Corp. aims to have as much of 50% of its portfolio in alternative assets by the end of 2022. That means the $941 billion fund is diving deeper into illiquid investments including real estate, infrastructure, hedge funds and private equity just as such trades are becoming increasingly crowded. CIC will also be diminishing its exposure to public markets that have rebounded strongly this year. For all the jitters over weakening global growth and the trade war, U.S. stocks are nudging record highs again and the MSCI World Index has climbed 17% in 2019.It’s little wonder that CIC is seeking ways to juice returns. The Beijing-based fund reported a 2.35% loss on overseas investments for last year as global equity markets tumbled, according to results posted Friday. That was the fourth unprofitable year for the international portfolio since CIC’s creation in 2007, when the fund was carved out of China’s then-ballooning foreign exchange reserves.CIC already has the among the highest proportion of investments allocated to alternative assets among state-owned global money managers, according to data from Sovereign Wealth Research, a unit of  IE University in Madrid. At the end of December, the ratio stood at 44%, equal to Australia’s Future Fund. Singapore’s GIC Pte had 19% of assets in alternative investments. The share for Norway’s Government Pension Fund Global, or GPFG, was just 3%. GPFG proposed changes to its mandate last month to allow it to buy stakes in unlisted companies after missing out on investments such as Spotify Technology SA. Norway’s government has repeatedly declined to let the sovereign wealth fund, the world’s biggest, enter the global private equity market because of concerns over transparency and management costs.Every investor would like to get his or her hands on the next hot unicorn in the hope that it will turn into another Facebook Inc. or Amazon.com Inc. once it goes public. That task isn’t getting any easier, though.  The presence of behemoths such as SoftBank Group Corp.’s $100 billion Vision Fund (and a second fund of similar size) have made the competition for lucrative investments more intense. And in any case, unicorn IPOs haven’t been doing so well lately, as my colleague Tim Culpan noted earlier this year.Three years ago, CIC had 46% of its overseas portfolio in publicly traded equities and 37% in alternatives. By the end of last year, the roles had reversed, with the share in stocks down to 38%. The fund’s international portfolio accounts for 34% of its assets.The Chinese fund faces hurdles that may impede its goals. CIC has lost key managers over the past two years, undermining the talent pool that’s necessary for successful hedge-fund and private-equity investing. In addition, China’s overseas acquisitions are facing tougher scrutiny amid rising trade tensions with the U.S. Marquee acquisitions such as the $13.8 billion purchase of Blackstone Group LP’s European logistics business Logicor in 2017 are likely to be harder to come by in future.Chairman Peng Chun struck a gloomy tone in the fund’s annual report, noting that “protectionism and unilateralism will continue to spread, geopolitical conflicts will recur, trade tensions will intensify, global economic momentum will weaken” and international capital markets would become plagued with uncertainties.CIC has cited volatility for wanting to reduce its exposure to public equity markets. That overlooks the fact that stocks are at least more liquid and easier to exit. There are also questions over the fund’s timing. In 2012, CIC posted losses after the commodities cycle peaked. Back then, bulking up in fixed income would have been a better bet. This move into alternatives may be another ill-timed wager. To contact the author of this story: Nisha Gopalan at ngopalan3@bloomberg.netTo contact the editor responsible for this story: Matthew Brooker at mbrooker1@bloomberg.netThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Nisha Gopalan is a Bloomberg Opinion columnist covering deals and banking. She previously worked for the Wall Street Journal and Dow Jones as an editor and a reporter.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.