There’s nothing like rumors about new products to give a floundering technology stock a shot in the arm.
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A day after Amazon announced it would be announcing a new product later this month, reports suggested that the Seattle online retailing giant was about to unveil a smartphone with 3-D capabilities. That futuristic possibility alone sent the stock up more than 5.4% to close at $323.59 on Thursday.
The rise in Amazon’s stock, which has fallen more about 20% since its six-month high of $407.05 in mid-January, is likely a welcome sign for CEO Jeff Bezos, whose net worth rose $1.4 billion to $29.9 billion. He still remains the 20th richest person in the world, just below Google cofounder Sergey Brin, who maintains a net worth of about $30.2 billion. At Amazon stock’s six-month high in January, Bezos was worth more than $36 billion.
While there have long been rumors of an impending phone from Amazon, Wednesday’s announcement of the launch event added more justification to the conjecture. The announcement came with a website that allows Amazon users to sign up to attend the event as well as video of first-time users of an unknown device gushing with superlatives and using their hands to gyrate the gizmo, which is purposely held off-screen. The device will be presented in Seattle on June 18 at a location that has yet to be disclosed.
An Amazon spokesperson could not immediately be reached for comment.
The public market has reacted well to the rumors that Amazon may soon up the ante against the likes of Apple and Samsung. The company’s first six months have been defined by a declining stock price due to the underwhelming reaction to the company’s April launch of $99 digital television box, Fire TV, as well as the more recent spat with publishing giant Hachette over online book pricing.
The possibility of a phone, however, sent shares up–at least on Thursday–and would make Amazon’s device portfolio more complete as it looks to add to its successful line of Kindle Fire tablets. Its CEO, however, will know not to read much into day-to-day share prices. As stated in journalist Brad Stone’s book on Amazon, The Everything Store, Bezos was known to quote British investor Benjamin Graham: “In the short term, the stock market is a voting machine. In the long run, it’s a weighing machine.”
For Thursday at least, Bezos’ pockets will weigh a bit heaver.
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