Amazon loses $45 bn market cap, Walmart sheds $5 bn on new FDI norms
New Delhi: As the shares of Amazon and Walmart lost 5 per cent and 2 per cent, respectively, on Friday, both the companies together lost a market capitalisation of $50 billion.
The fall in stock prices can be attributed to disruption caused in their e-commerce operations in India after the new foreign direct investment (FDI) norms for the e-commerce sector came into effect on Friday, analysts said.
Amazon lost market capitalisation of over $45 billion on the Nasdaq, while Walmart shed over $5 billion on the New York Stock Exchange (NYSE). The market cap of Amazon was $798.81 billion at the end of Friday’s trade while that of Walmart was $272.69 billion.
Shares of Amazon on the Nasdaq fell 5.38 per cent to $1,626.23 per piece on Friday. Stock price of Walmart on the NYSE ended 2.06 per cent lower at $93.86.
Amazon India had to pull out many products and was listed as “currently unavailable” as the new norms prohibit e-tailers from selling products of companies in which they have stakes.
Both Amazon and Walmart had sought an six-month extension extension of the deadline for the new norms, but the government rejected the plea and the norms came into effect on February 1.
The new norms, released in December, prohibit online retailers from mandating any company to sell its products exclusively on its platform. In the new policy, the Commerce Ministry also noted that the online retail firms will not directly or indirectly influence sale price of goods and services and will maintain a level playing field.
Although major stakeholders led by Walmart and Amazon had sought an extension, other players like Snapdeal and offline traders, led by the Confederation of All India Traders, supported the government move.
After the plunge on Friday, stocks of both the American companies are likely to stay subdued on Monday, according to analysts.
