Amazon.com, Inc. (Nasdaq:AMZN) is a massive business that is a becoming a massive challenge for retailers day by day. Well, if you don’t know that Amazon poses a big threat to retailers, you might be from another planet. Launched as an online bookstore in 1994 by Jeff Bezos, Amazon has become an e-commerce behemoth with a market cap of more than $527 billion. In this piece, we will take a look at some interesting comments about Amazon made by two hedge funds – Horizon Kinetics and Wedgewood Partners – in their Q3 investor letters. First, let’s take a look at what Horizon Kinetics said about Amazon.

Amazon is the fourth most valuable public company in the world, the largest internet firm by revenue in the world, and the eighth largest employer in the United States, according to a report from CNBC. Amazon is one of the most popular stocks among hedge funds tracked by Insider Monkey. There were 132 funds in our database with bullish positions in the tech giant.

Amazon is a Disruptive Force: Horizon Kinetics

Horizon Kinetics, in its Q3 investor letter, said that Amazon is clearly a disruptive force. According to the fund, Amazon has destroyed the profitability of entire industry sectors and will continue to do so. The online retailing giant wiped out all the bookstore chains but opened a half-dozen physical bookstores of its own in New York and other cities in 2017.

[Amazon] is destroying profit margins in the retailing industry, and by extension is threatening the real estate that houses those retailers, and by further extension the profitability of the REITs that own the real estate. And by acquiring Whole Foods, Amazon is threatening the grocery store chains.

 

Meanwhile, Horizon Kinetics believes the next big thing in the technology industry would be cryptocurrency and blockchain technology. The fund discussed both technologies in details in its Q3 letter (you can download a copy here).

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