collected by :John Locas
as mentioned in
Amazon.com, Inc. (NASDAQ: AMZN ) has now invited that kind of attack through its pending purchase of Whole Foods Market, Inc. (NASDAQ: WFM ).
But Amazon’s strategy this century has always been based on offering its infrastructure to competitors, watching what they do with it, and then crushing them with its own offerings.
With Whole Foods, Amazon could wipe thousands of its Marketplace vendors off the competitive map by fulfilling orders out of its own stores, or from competing WFM merchandise.
AMZN Stock: The StrategyAmazon is buying media because it sees how Netflix, Inc. (NASDAQ: NFLX ), a big Amazon Web Services customer, has succeeded with it.
AMZN is bringing this strategy into the “meat space” of shopping that could get the company into trouble.
One of the most likely reasons for the premium on Whole Foods Market stock is the existence of other bidders.
Whatever they choose to say publicly about the Amazon-Whole Foods deal will likely guide the firm’s stock price going forward.
Amazon.com, Inc. (NASDAQ:AMZN) brought in a lot of positive buzz over the weekend after its $42 per share bid for Whole Foods Market, Inc (NYSE:WFM) .
Jeff Bezos and the other big execs at Amazon have big plans for Whole Foods Market, Inc (NYSE:WFM).
At time of writing shares in Whole Foods Market were due to open at $42.60.
The Bond Market Reacts: Amazon, Whole Foods And Kroger – Amazon.com, Inc. (NASDAQ:AMZN)
General Background on Reduced Form ModelsFor a general introduction to reduced form credit models, Hilscher, Jarrow and van Deventer (2008) is a good place to begin.
The default probabilities for Whole Foods, of course, will approach those of Amazon as the merger moves toward the closing date.
The theoretical basis for reduced form credit models was established by Jarrow and Turnbull (1995) and extended by Jarrow (2001).
Shumway (2001) was one of the first researchers to employ logistic regression to estimate reduced form default probabilities.
Whole Foods bond holders scored the second-biggest gain in the U.S. corporate market on Friday.