Amazon Stock Performance

Numerous businesses in the United States of America sell their stock on the national stock exchange. Stock markets enable businesses to raise additional capital to fund their operations. Many successful corporations have traded their shares on the New York stock exchange, allowing them to stay competitive. To participate in the stock market, companies must declare their main stockholders. Businesses must provide as accurate information about their financial situation and shareholders as possible. Failing to disclose accurate information may result in the withdrawal of a firm from the stock market or clients refraining from purchasing shares owing to a lack of sufficient information. Amazon is one of the companies listed in the New York stock market. Amazon shares have been trading in the stock market for a while now. The company’s shares remain one of the most bought shares. Investors are very keen to buy Amazon shares due to the high returns the business has been posting. Advertisements concerning the shares of the company takes place on a daily basis in the market, and people have been competing for them. Despite that, the company has not been clear on the number of shareholders who hold the highest shares in the enterprise. The company has been reluctant to give out information that will tell potential shareholders who majority shareholders are and their value of invested capital. The situation can affect the performance of the firm in future if not checked.

Amazon does not publish a list of majority shareholder for fear that the people may become under scrutiny by the government or their roles in the daily management of the entity may become questionable. Amazon keeps the number of highest shareholders a secret because of internal concerns that may affect the firm’s reputation in the market. Some shareholders are involved in the running of the stock exchange, and by listing them, people may question the real performance of the firm. Some investors may propose that the majority shareholder influences the performance of the company’s shares and that the enterprise is not as competitive as it may appear. In the end, the company may lose out in the stock market.

Secondly, the decision to keep the list on an individual basis results from the need to have more people buy the shares. When potential shareholder gets to know the value of shares owned by the majority shareholder, they may not purchase the share for fear of becoming insignificant in the business (Guresen, Gulgun and Tugrul 10389). Amazon is keen to ensure that even people with least resources had shares in Amazon and considered with importance as they contribute to the total value to the firm. In the process, those who buy small amounts of stock will continue doing so with the aim of becoming majority shareholders at one time.

Sometimes activities of a majority shareholder may affect the performance of the firms share in the stock market. To avoid such issues the company opts to keep the identity and number of majority shareholder a secret. Some of the principal shareholders may be influential people who shape opinion in the United States. Sometimes not all favor their views. An individual who has been affected by a policy a principal shareholder in Amazon advocated for may not want to buy a share in Amazon (Li 148). Such scenarios may complicate the trading of shares in Amazon.

The decision to keep the number of principal shareholders in Amazon a secret may affect the performance of the firm’s shares in the stock market. Potential investors are always willing to invest their resources in the company having known fully all information related to the enterprise. When an investor does not find information showing the majority shareholder and the value of their capital, they may shy away from buying Amazons shares (Guresen, Gulgun and Tugrul 10396). The situation sometimes is interpreted as a deliberate means to deny another shareholder information about the firm to manipulate them. Many shareholders will not trust the corporation’s administration and even query the purpose of democracy in running the business. Good business practice calls for the management team of a company to give full information about a firm and its owners. By failing to provide such critical information may make people have negatives thoughts about the company, which will affect the firm development agenda.

The choice to withhold the names and share value of majority shareholders go against the fundamental principles of good governance. Businesses listed in the stock market need to be transparent and accountable to all shareholders. It may be difficult to know the performance of the company or the total worth of the company when the exact number of principal shareholders is not known. The choice to withhold the number of principal shareholders maybe have hidden agendas that can affect the running of daily activities in the firms. Shareholders have much responsibility in term of choosing ways of managing Amazon (Li 145). Majority shareholder has higher voting rights when selecting a team to manage amazons operations. It will be unclear who is pushing for implementation of individual decisions, as their share capital is not known. That may give room for a particular person who is not majority shareholder impose their decision on the enterprise, in the end, putting the majority shareholders invested capital in danger.

Failure to disclose the information may make the firm’s shares prices to go down. People will question the company’s decision, and the suspicion that will follow will make investor not buy Amazons shares. When potential investors fail to purchase the business shares, their value will go down making the organization lack substantial resources to carry out its expansions activities (Guresen, Gulgun and Tugrul 10340). Failure in stock price will also affect the popularity of the enterprise. When the share goes down, rival companies may take up the opportunity to float their share in the market in the end out competing for the firms. With the current state of competition in the market, Amazon can lose out big if is stock prices go down. Those who have invested in the firm can pull out if they feel their investments are not safe. When they pull out their resource, the companies can lack resources to go about its daily operations in the process it will be declared bankrupt.

Amazon has various reason for not disclosing its principal shareholders to the public. The decision has a potential to affect the performance of the firm shares in the market. A top shareholder has exclusive voting rights in deciding the management of corporations affairs. Failure to make the number public may affect decision-making processes, as some shareholders will be making decisions having not consulted with all the majority shareholders.

Reference

Guresen Erkam, Gulgun Kayakutlu, and Tugrul U. Daim. “Using artificial neural network models in stock market index prediction.” Expert Systems with Applications 38.8 (2011): 10389-10397.

Li, Feng. “Textual analysis of corporate disclosures: A survey of the literature.” Journal of accounting literature 29 (2010): 143-156.