Amazon’s PillPack deal cost the healthcare industry $24 billion in market cap
Amazon’s plan to push deeper into healthcare by acquiring PillPack, a prescription-management startup, has rattled the markets.
Shares of major US healthcare companies went into freefall today (June 28). CVS Health and Walgreens tumbled as much as 10% within the first hour of trading—wiping out more than $6 billion in market cap each. Altogether, the market value of 10 big healthcare companies fell by $23.5 billion in the first hours of trading.
Amazon put the industry on notice in January, when it announced plans to launch a low-cost, independent healthcare company for employees in partnership with JPMorgan and Berkshire Hathaway. That announcement erased $30 billion in market value for the biggest names in a matter of hours.
Amazon stock, by comparison, was up 1.5% to about $1,685 in early trading. That should be seen as a strong endorsement from Wall Street, as the stock of an acquirer usually falls when a merger is announced.
Why is the industry so afraid of Amazon, competition is always great for strong businesses, but we find so often now a days that whenever Amazon ventures into a product space the fear factor goes up. This fear not only invades corporate America but that fear has gone all the way to the White House, where Trump tried to use underhanded squeeze tactics to attack Jeff Bezo and his empire.
Watch out folks Old Jeffie Boy is here and be aware that he has power beyond your fear. “Scared money cannot win”; And old saying by a successful gambler from the 1990’s.