Amazon.com Inc. (AMZN)’s Jeff Bezos Got the Memo on Making Peace with Trump

Amazon.com (AMZN) Amazon

Amazon.com Inc. shareholders must impress on CEO Jeff Bezos the need to be cautious and avoid getting into President-elect Trump’s bad graces. During the campaign and buildup to the 2016 elections, Trump and Bezos exchanged some heated words. Of course, it was obvious that Bezos rooted for for Hillary to become president. Last Thursday, I wrote about how the firm could be in for a tough run under Trump.

Jeff Bezos has much to lose if it gets on the wrong side of president Trump because his firm’s business extends into many areas that would bring it in regular contact with Washington. Amazon has the biggest online store stateside, it is into cloud computing, delivery drones, artificial intelligence, and it has forays into entertainment with Prime TV, Music among other things.

Amazon.com, Inc (AMZN)

Here’s why Bezos must make peace with Trump

Last month, Bezos accused Trump of “eroding our democracy” and “Saying that he may lock up his opponent erodes our democracy around the edges.” It appears that Jeff Bezos got the memo about why a fight with Trump could be bad for Amazon.com Inc . To start with, the shares of Amazon declined by 2.6% when the news of Trump’s victory broke. Now, Bezos is out with an olive branch towards the same Trump he has such much vilified before the election.

Jeff Bezos was quick to do an about turn as a sign of an “open mind” in tweet he posted to congratulate Trump. He says, “Congratulations to @realDonaldTrump. I for one give him my most open mind and wish him great success in his service to the country.”

Interestingly, political commentators think Bezos is making a smart move to mend fences with Trump. For instance, Tim LaPira, associate professor of political science at James Madison University observes that Bezos need to be in Trump’s good graces if he doesn’t want his lobbying efforts in Washington to be wasted. In his words, “If a CEO and a major public official, the President of the United States, don’t have a good relationship, then it’s going to be that much harder for that company.”

Amazon did not hide its lobbying effort – after all, lobbying appears to be the order to the day in the nation’s capital. In 2015, the firm increased its lobbying spending by 91% to $9.07M. The firm has already spent some $8.62M on lobbying in the first three quarters of 2016.

Will Trump take the high road on Amazon?

Amazon.com Inc understands the risk it faces if the government changes its policies. The firm says “we are subject to general business regulations and laws, as well as regulations and laws specifically governing the Internet, e-commerce, electronic devices, and other services. Existing and future laws and regulations may impede our growth.”

However, if it is still too early to know if Trump will take up issues with Amazon or let sleeping dogs lie. The president elect is still working out the plans for his administrative agenda and Amazon’s is just a distraction for the time being. Nonetheless, the fact that Amazon is down almost 6% since Trump won the election while the Dow is at an all-time high is not entirely reassuring for investors.

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Adam Green is an experienced writer and fintech enthusiast. He he worked with LearnBonds.com since 2019 and covers a range of areas including: personal finance, savings, bonds and taxes.


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