The street likes what it hears. This morning, prior to the market opening, Amazon announced that it was raising the price of its Prime subscription membership by $20 to $99 a year. The company’s stock followed suit and opened the day at $376, trading at up 1.63% on the day.
This stock price increase puts its highest level since the dramatic crash following disappointing holiday earnings. The price hike will significantly improve the company’s margins.
Still, even with the dip six weeks ago, the stock price is up 35% year over year, and currently trading at $380 a share. Most research firms list the stock with a buy rating.
Today’s news follows weeks of speculation stating that Amazon could increase the price of its popular Prime service that grants members with access to free 2-day shipping on many items, access to a Netflix-like streaming service and the ability to read Kindle books through the Kindle Lending Library.
The new price is an increase of 20%. But as a long time Prime subscriber, I’ll be the first to stand up and state the service is still worth the extra money. It pays for itself with several purchases.
