Why Amazon Stock Climbed Today
What happened
Shares of Amazon (NASDAQ: AMZN) rose 1.8% on Thursday, as excitement for the e-commerce juggernaut's Prime offerings grew among shoppers and investors alike.
So what
Amazon Prime offers members a host of benefits. For $14.99 per month or $139 per year, subscribers can get free two-day (and, increasingly, same-day) delivery on millions of items. They can also access thousands of shows on Prime Video and millions of songs on Amazon Music. Book rentals, gaming, photo storage, and a host of other services also add to Prime's value.
Never one to rest on its laurels, Amazon constantly tries to make Prime even more alluring to consumers. On Tuesday, the company announced that Prime members could sign up for a free one-year membership to Grubhub+. The service, which is valued at $9.99 per month, offers unlimited no-cost delivery from thousands of restaurants across the country.
Investors were thrilled to see that the deal also gave Amazon warrants to purchase a 2% stake in Grubhub. That stake could increase to 15% if the partnership helps Grubhub achieve certain customer growth targets.
And on Wednesday, Amazon announced an array of shopping deals for its upcoming Prime Day event. The shopping bonanza kicks off on July 12 and will feature sizable discounts on Amazon's devices and products from a wide range of third-party merchants.
Now what
Amazon's partnership with Grubhub could help it gain a stronger presence in the rapidly expanding food-delivery space. It could also help Amazon gain more Prime members, who tend to be the online retail giant's most profitable customers.
Additionally, a successful Prime Day event could help Amazon reduce some of the slack in its massive fulfillment network. The company is also reportedly planning to hold a second Prime shopping event later this year to further boost sales.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Joe Tenebruso has the following options: long January 2024 $100 calls on Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy.
