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Shutterfly Share Price Collapse

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Editor’s Remarks:
Shutterfly saw the value of its shares tumble late Wednesday afternoon by 11.17%. The Nasdaq-listed e-commerce company based in California is a popular site for printing photos and creating personalised gifts. Shutterfly’s worst single trading day decline was triggered by Amazon Inc. launching their new printing service “Amazon Prints”. Amazon Prints significantly undercuts Shutterly’s photo prices, and with analysts estimating that Amazon Prime has between 45 and 63 million subscribers in the US alone, the market has evidently taken note. Amazon’s announcement is not a case of coincidental timing; Shutterfly makes more than half of its revenue in Q4 during the holiday season. Shutterfly could see further declines in its share price in the long-term, as Amazon Prints take market share principally on the basis of the convenience and services offered by Amazon Prime. This is somewhat representative of the current corporate trend that is seeing the global economy dominated by a small group of giants. The likes of Amazon are either absorbing the competition, or in the case of Shutterfly, squashing them.

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