Suppliers who wish to make Amazon.com Inc. a customer for their goods and services may find that there is a problem with its business: the right for Amazon to purchase large stakes in their businesses at potentially large discounts from the market. market value.
The tech and retail giant has made at least a dozen deals with publicly traded companies in which it obtains rights, called warrants, to buy the shares of sellers in the future at that time. which could be lower than market prices, according to the documents filed and interviews with people involved in the transactions.
Over the past decade, Amazon has also made more than 75 such deals with private companies, according to a person familiar with the matter. In total, the tech titan’s stakes and potential stakes run into the billions of dollars in all companies that provide everything from call center services to natural gas, and in some cases, position Amazon among the main shareholders of these companies.
The unusual arrangements provide another window into how Amazon is using its weight in the market to increase its wealth and influence. The company is increasingly scrutinized by regulators and lawmakers over its competitive practices, including with companies with which it partners.
While the deals can benefit suppliers by locking in large contracts, which can also increase their stock prices, executives at several companies said they believe they can’t refuse Amazon’s pressure to do so. right to buy the shares without risking a major contract. In some cases, the agreements also give Amazon rights such as board representation and the ability to outperform any takeover bid from other companies.