Amazon shares drop again as Trump continues to slam the company over its US Postal Service contract
US President Donald Trump on Monday renewed his criticism of the US Postal Service’s arrangement with Amazon.com, saying he would change how much the country’s largest online retailer pays in shipping fees.
“Only fools, or worse, are saying that our money losing Post Office makes money with Amazon,” he tweeted Monday morning. “THEY LOSE A FORTUNE, and this will be changed.”
Shares of Amazon.com Inc initially fell 6 per cent on Monday after the tweet, falling to US$1,362.48, wiping out nearly US$45 billion from its market value. The stock closed down 5.2 per cent.
Shares in the online retail giant have plunged 11 per cent since last week, when Axios reported that the president was “obsessed” with regulating the company. That wiped about US$75 billion from Amazon’s market capitalization.
It has also taken eight points off the S&P 500, where Amazon has the fourth-biggest weighting, at 2.5 per cent.
The equity benchmark has fallen 2 per cent in that time and now sits more than 9.5 per cent below its January record.
Ironically, Trump made much of the growth of the stock market at the start of his administration - something he is now actively damaging.
Monday’s tweet marked the third time since Thursday that Trump has lashed out against Amazon.
Last week he attacked the retailer for paying “little or no taxes to state & local governments” and said the company uses “our Postal System as their Delivery Boy (causing tremendous loss to the US.)”
Two days later, he asserted that USPS loses an average of $1.50 on each Amazon delivery. “This Post Office *scam* must stop. Amazon must pay real costs (and taxes) now!” he tweeted.
Amazon collects local taxes in the 45 states that require it, although third-party sellers may have other arrangements.
Trump also incorrectly said The Washington Post is a lobbyist for the retailer. The Post is personally owned by Jeff Bezos, the founder and chief executive of Amazon. It operates independently of Amazon.
Amazon and USPS declined to comment on Trump’s tweet Monday morning.
The Postal Regulatory Commission, an independent federal agency, oversees the postal service’s pricing structure and reviews its contract with Amazon annually.
Amazon does receive a discount from the Postal Service, though the details of that arrangement have not been disclosed. An independent regulator reviews the contract every year to make sure that it continues to be profitable for USPS.
Although Monday’s tweet was the first time the president implied that he would try to change how much USPS charges Amazon, he has railed against its pricing structure in the past.
In December, Trump attacked the company’s arrangement with the US Postal Service and said the agency should raise the shipping rates it charges Amazon.
“Why is the United States Post Office, which is losing many billions of dollars a year, while charging Amazon and others so little to deliver their packages, making Amazon richer and the Post Office dumber and poorer?” he tweeted. “Should be charging MUCH MORE!”
A fast rise in parcel deliveries - many of them from Amazon - has helped offset some of the postal service’s losses in recent years.
In 2017, USPS delivered 589 million more packages than it did a year earlier, amounting to an 11.4 per cent growth in volume and US$2.1 billion increase in revenue. Mail volume, meanwhile, decreased by about 5 billion pieces, or 3.6 per cent.
Overall, the postal service reported a US$2.7 billion loss last year on revenue of US$69.6 billion.