Will Amazon Bounce Back From Its 2% Gap Down And The Impact Of Unethical Review Practices

• Approximately 10% of Amazon shoppers in Great Britain may have been offered bribes for positive product reviews.
• Amazon’s stock experienced a significant decline, gapping down over 2%.

A recent survey conducted by UK consumer body, Which?, has uncovered alarming insights into the credibility of online reviews on Amazon.com, Inc. AMZN.

According to the survey, around 10% of Amazon shoppers in Great Britain may have been approached with bribes in exchange for positive product reviews in the past year.

The existence of unscrupulous Amazon sellers engaging in unethical practices to manipulate the system has become a concerning trend.

These sellers entice customers with incentives like gift cards, free products, and refunds in exchange for positive reviews.

Consequently, the authenticity and reliability of user feedback on the platform are compromised.

Amazon has promptly addressed these findings, underscoring its strict policies that explicitly forbid any form of review abuse.

The unethical practices in question have far-reaching consequences, going beyond just eroding consumer trust. Investors of Amazon's stock could also be affected.

On September 21st, the stock experienced a significant decline, gapping down over 2% and ending the day with a decline of over 4%.

This downturn represents a 13% decrease from the recent peak on September 14th, when the stock price failed to break the August 2022 high at $146, a level that has proven to be a formidable resistance.

The combination of negative press and a weakened stock has the potential to trigger additional declines in the stock price.

Should the stock continue on its current downward trajectory, it could reach the next level at $144, a support level derived from the high in February 2023.

However, it is crucial to place this decline in the context of Amazon's overall stock performance.

With a substantial increase of 47% year to date, the recent setbacks should be seen as temporary obstacles.

This indicates that the stock still holds significant potential for recovery and growth as long as it can find strong support to form the base before the next bull run.

After the closing bell on Wednesday, September 27, the stock closed at $125.98, trading down by 0.03%.