Question
Amazons market capitalization increased by $11.34 billion on June 16, 2017. Noting that this increase was similar to the $13.7 billion purchase price, a CNBC
Amazons market capitalization increased by $11.34 billion on June 16, 2017. Noting that this increase was similar to the $13.7 billion purchase price, a CNBC reporter argued that, Amazon got Whole Foods essentially for free. a. Did Amazon get Whole Foods essentially for free? How do you interpret the fact that Amazons stock valuation increased by $11.34 billion on the day that its WFM acquisition was announced? b. Suppose the increase in Amazons stock valuation (by $11.34 billion) was due to its announced acquisition of WFM. By how much did investors think Amazon would be able to increase WFMs revenue growth and/or decrease costs?
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