Amazon.com Inc. (Nasdaq: AMZN) stock has dropped 10% today (Friday) prompting the Nasdaq to implement a short-sale restriction on the stock.
The short-sale restriction is triggered when a stock falls 10% in one trading session from the previous session's closing price. The restriction aims to prevent share-price manipulation by short sellers.
The sell-off began after Thursday's earnings release when AMZN reported earnings per share (EPS) of $0.51 on revenue of $25.59 billion, which was well below analysts' estimates of $0.66 per share on revenue of $26.06 billion.
But analysts' projections were lofty. The consensus EPS projection was an incredible 268% higher than what AMZN had posted the previous year.
In fact, yesterday Amazon reported an increase of 148% in EPS year over year. And AMZN reported $74.45 billion in revenue for the entirety of 2013, which was 22% higher than in 2012.
But this AMZN plunge doesn't mean the stock will disappoint in 2014...
Why to Buy AMZN StockA minor blip in stock performance would have been one thing, but a 10% sell-off in one day following yesterday's earnings is surprising. Obviously, Amazon fell short of expectations, but it still posted strong numbers.
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According to Money Morning's Defense & Tech Specialist Michael Robinson, this 10% drop offers an excellent buy-in point for investors.
Robinson appeared on FOX Business' "Varney & Co." today and was asked what he'd do with Amazon stock if it keeps falling - maybe as low as $350.
"[$350 a share] is a great price for Amazon. It's an excellent company. I'm not sure that Wall Street's expectations were in alignment with reality," Robinson said. "What no one's talking about is the 53% increase in the division that includes cloud sales to more than $1.2 billion, which is enormous. Overall I think it was a pretty good report."
In 2013, AMZN stock posted an impressive 63% gain. The stock has come back to Earth a bit in 2014 - currently trading at $364 as of 2:00 pm EST today.
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Tags: Amazon earnings, Amazon Stock, amazon stock video, AMZN, amzn earnings, AMZN Stock, Investing in Amazon, Nasdaq: AMZNThe post Amazon (Nasdaq: AMZN) Stock Drop Is Change to Buy appeared first on Money Morning - Only the News You Can Profit From.