Amazon’s share price rose 40% over a two-day period last week (its highest level since April 2000) after it released earnings. That’s a lot of volatility for a company which went public 11 years ago (May 1997). Volatility in the financial markets speaks to the degree of unpredictable change. Given the scale and apparent stability of Amazon’s core business, high levels of volatility are surprising. One explanation for the sudden price movement provided in the financial media has been the extent of shorts on the stock.
Those positions were naturally covered on news of positive earnings. But there’s a deeper issue at hand. Amazon is a highly innovative company in a highly innovation medium. It’s not lost on Jeff Bezos that e-tailing may not always be the biggest franchise opportunity for the company.

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