• Research

Oct 26, 2017

S3 Analytics: Drug Retailers Will Be Looking for an Amazon Cure

Amazon.com Inc. (AMZN) is in the process of acquiring wholesale pharmacy licenses in 12 states according to the St. Louis Dispatch. Although these licenses would not allow them to compete directly with CVS Corp (CVS), Walgreens Boots Alliance (WBA) and Rite Aid Corp (RAD) it may be the first step in getting retail license that would put Amazon.com in direct competition with the brick and mortar pharmacy retailers.

Short interest in the U.S. Drug Retail Sector declined by $1.1 billion over the last month, short interest is down to $3.6 billion today.

All four Drug Retail stocks were trading relatively flat until the Amazon.com announcement came out around 2:30, and their stock prices quickly fell on average 3.6%. Short sellers made over $100 million in mark-to-market profits in the hour and a half before the close. Drug Retail shorts are now up $874 million in mark-to-market profits for the year.

With Amazon.com entering the retail pharmacy business, we can expect short selling to reverse course and increase in the near future and get closer to the $5 billion levels seen in late summer.

Want deeper insight into the above analysis? Contact:
Ihor.Dusaniwsky@S3Partners.net
Managing Director Predictive Analytics, S3 Partners, LLC
The information herein (some of which has been obtained from third party sources without verification) is believed by S3 Partners, LLC ('S3 Partners') to be reliable and accurate. Neither S3 Partners nor any of its affiliates makes any representation as to the accuracy or completeness of the information herein or accepts liability arising from its use. Prior to making any decisions based on the information herein, you should determine, without reliance upon S3 Partners, the economic risks and merits, as well as the legal, tax, accounting and investment consequences, of such decision.


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