Amazon CEO Jeff Bezos is becoming increasingly obvious about his willingness to saddle shareholders with losses — big losses.
Amazon’s stock tumbled 10 percent in after-hours trades Thursday after the online retail giant posted its biggest quarterly loss since 2012 and said operating losses will grow far steeper in the current quarter, possibly topping $800 million.
Heavy selling after-hours sent Amazon shares as much as 20 percent below where they started this year, capping months of investor frustration over Bezos’ free-spending ways.
Bezos has ruthlessly expanded Amazon by undercutting competitors on price, and has spent lavishly to roll out new warehouses to bolster the company’s distribution capabilities to include Sunday delivery.
Amazon has likewise unleashed a plethora of new services such as grocery delivery, a set-top box, music streaming and unlimited e-books, even as it unveils new gadgets to compete with tech rivals like Apple and Samsung.
To offset his spending spree, Bezos has been squeezing vendors hard, most recently landing Amazon in a public spat with publisher Hachette over the future pricing of e-books.
Nevertheless, the company revealed Thursday that there is no end in sight to the cash bleed.
Wall Street was caught off guard in particular by a forecast for an operating loss between $410 million and $810 million in the current quarter — more than half of which could be attributable to Bezos’ taste for high-priced talent.
Indeed, Amazon said $410 million of the current quarter’s expected operating loss will come from stock-based compensation and other items.
Stock-based perks for employees totaled $391 million during the most recent quarter, helping drive a net loss of $126 million, or 27 cents a share, compared with a loss of $7 million, or 2 cents a share, a year earlier.
Analysts had expected a loss of just 15 cents a share. Amazon shares, which had closed at $358.61 in regular trading Thursday, lost more than 10 percent after the results were posted.
The loss came despite a 23-percent surge in revenue to $19.34 billion, which was in line with Wall Street’s expectations.
On Friday, Amazon will begin selling the Fire phone, a competitor to Apple’s iPhone that has gotten mixed reviews for its high price and a slew of features that are prone to glitches.
The new gadget took three years to develop and thousands of Amazon programmers and designers worked on the project.