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The Wall Street Journal: Daniel Loeb sees $1 trillion in untapped value in Amazon

Activist investor Daniel Loeb, whose Third Point LLC counts Amazon.com Inc. as one of its biggest holdings, told investors on Wednesday that he sees roughly $1 trillion in untapped value at the e-commerce giant.

Loeb said on a private call with the hedge fund’s investors that the market is failing to recognize the full value of Amazon’s 
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 two disparate businesses, its core e-commerce operation and its Amazon Web Services cloud unit, according to people familiar with the matter. The call reviewed Third Point’s 2021 performance and its outlook on markets and a number of stocks were discussed.

AWS, as Amazon Web Services is known, has a so-called enterprise value of more than $1.5 trillion, almost as much as the company’s current market value of $1.6 trillion, according to a slide shared on the call, the people said. Meanwhile, Amazon’s retail business could be worth some $1 trillion, the slide said.

There is no sign that Loeb, one of the best-known shareholder activists, is pursuing an activist campaign at Amazon. The basic sum-of-the-parts analysis of Amazon has been widely discussed in recent years on Wall Street—especially since antitrust regulators began zeroing in on the increasing power of large tech companies like Amazon, fueling talk of potential break ups.

An expanded version of this report appears on WSJ.com.

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