Margins declined significantly - from 34% to 22%. This stock was in the stratosphere because of hopes of future margin expansion. It did not pan out - hence the decline. This could go down to be a sub-100 dollar stock. Keep your STOP LOSS orders active.
1) No longer the king of e-books. They have to sell Kindle's at a loss now just to not lose share faster than they are.
2) Internet tax is coming. Not only will this hurt sales, it will be expensive for Amazon to implement this.
3) Brick and mortar retailers are getting smarter. They are willing to price match. That coupled with sales tax no longer being a benefit, people will buy the big ticket items with higher margins locally than risk getting a smashed tv box on their doorstep.
4) Cloud competition is coming fast and prices are going to drop fast.
All in all, Amazon has zero pricing power anymore. They couldn't make a profit before, forget it now.
Wait until they try to get into cellphones, that will increase the loss. I think institutions are starting to see the writing on the wall and don't want to be last to get out. Why hold Amazon that still can't make a profit with sales slowing dramatically when you could buy Apple or Google with real balance sheets and low p/e's.