An Efficient market hypotheses seems not fair for Amazon investors.

The online seller Amazon has reported a revenue of $17.4 billion in its Christmas quarter , which is a 35 percent increase from a year ago. Yet the investors of Amazon are not happy as the company did not met analyst expectations. It was $800m bellow  than estimated.  Hence the share price has fallen by  nearly 9 per cent in after-hours trading.

However though the sales were high by 35 percent, the operating income of Amazon has decreased by 45 per cent to $260m from a year ago. This  shrinking profit margins earlier last year has been endorsed by the company’s argument that it was making investments that were yielding faster sales growth. These investments included development of Kindle fire tablet computers. The company mentions the picking up on Kindle fire computers has dragged other sales down.

However Amazon had warned investors about a potential operating loss, but Amazon has managed to avoid it.   Nevertheless the major attention by analysts was the sales growth percentage.

Couldn't be that the analysts were really wrong? Amazon has managed to avoid the operating loss, though it as not satisfied analysts in terms of sales growth. Market efficiency does not mean that  the share price  are equal to the true value at every point. Amazon share price has been undervalued. In this situation more than the company financial data, its the peoples emotions that has dragged to make Amazon investors unhappy. Isn't that, an efficient market should consider all available data in the market but in this situation it seems the market has considered only the analyst view point.

Source: Ft.com and http://finance.yahoo.com