Shares of Amazon.com continued their downward slide Wednesday morning in the wake of a harsh Lehman Brothers analyst report and upheavals in management.
Amazon's stock was off 2 1/8 to 35 1/2. The company is scheduled to post second quarter results after the market closes Wednesday. First Call consensus predicts a loss of 35 cents per share.
Shares in the company took a big slide Tuesday on the news that president Joe Galli was leaving to become chief executive of business to business marketplace VerticalNet.
Today, Lehman analyst Holly Becker cut her rating to "neutral" from "buy", stating that she was "throwing in the towel" on the online retailer.
"To justify current valuation, the company must expand beyond books, and to date the company's new businesses have demonstrated a lack of traction," she said. "Despite its powerful brand name and large, loyal customer base, there is softness in key consumer metrics."
The company has said that its books business is profitable, but has not made similar claims regarding the host of other categories it has expanded into.
Amazon has yet to come anywhere near reporting a net profit, and chief executive Jeff Bezos said as recently as last month that the company's focus right now is on "growing the business".
Last month, a Lehman Brothers bond analyst sent Amazon shares plunging after issuing a report questioning the company's debt load, and saying that under a "best-case scenario", the company's current cash balances would only last through the first quarter of fiscal 2001.
Amazon.com shares fell to a 52-week low of 32 7/16 earlier this month after peaking at 113 in December. Twenty-six of the 33 analysts following the stock rate it either a "buy" or "strong buy".
Reuters contributed to this story.
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