Amazon And Zappos Defy The M&A Norm
July 23, 2009 by Tisa Silver
Filed under Finance
Once announced, most merger and acquisition activity leads to a stock price decline for the purchaser and a rise in price for the stock of the company being acquired. Not for Amazon and Zappos.
Photo by cd.harrison, courtesy of flickr
According to Business Week, Amazon.com (Ticker: AMZN) has agreed to buy Zappos.com for approximately $847 million.
Zappos.com is a privately held company, so there is no stock price to monitor. But shares of Amazon have actually risen since the news was released. The stock is currently trading almost six percent higher.
From what I have seen of Zappos.com, the bounce may be justified. Their customer service is outstanding and they ship shoes with an extraordinary quickness!
Zappos.com will retain its Nevada headquarters, and more importantly, its management team. I take this as proof that Amazon’s management recognizes the good in Zappos.com, just as it is.
Hopefully, this will be the start of a profitable relationship!
