Should Amazon split into two companies?

Should Amazon split into two companies?

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E-commerce giant Amazon has been the focal point of a variety of attacks from President Trump and his administration, and one analyst thinks the company should split in two to avoid increased regulation and potential antitrust action.

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Citi Research analyst Mark May said in a note to clients on Monday the company should consider separating its retail business from its cloud computing division – Amazon Web Services (AWS) – after the company passed the $1 trillion in market value, as reported by Investor’s Business Daily Opens a New Window. . May estimated that the retail segment would be worth about $400 billion, while AWS would have an enterprise value of $600 billion.

“There has been greater noise of late regarding the desire to investigate and potentially regulate the company,” May wrote. “By separating the retail and AWS businesses, Amazon could minimize or avoid the risk of increased regulatory pressure.”

The analyst said Trump appeared “obsessed” with the company.

In addition to evading regulatory attention, the split could help the company retain more cash for potential acquisitions and increase shareholder value.

May has a price target for Amazon shares set at $2,250, which represents a 14 percent increase from current levels. He estimates the number of Prime subscribers could reach 275 million over the next 10 years.

Trump has been highly critical of Amazon founder Jeff Bezos on Twitter, especially when it comes to his ownership of The Washington Post. Trump has also gone after Amazon for its shipping deal with the U.S Post Office.

The president has said the company has “a huge antitrust problem Opens a New Window. .”

Meanwhile, earlier this month, Independent Vermont Sen. Bernie Sanders unveiled a bill, called the “Stop BEZOS Act Opens a New Window. ,” which would impose a 100 percent tax on large companies, like Amazon, for the public benefits employees at their company receive from the federal government.

Over the weekend, reports surfaced that the e-commerce giant is investigating employees for allegedly accepting bribes in exchange for leaking confidential company data and other benefits.

Source:- foxbusiness

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