Why Amazon stock popped today

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

What happened

Shares of e-commerce giant Amazon.com (NASDAQ: AMZN) jumped 2.39% on Monday, the stock’s fourth straight day of price gains. The big news today:

Amazon is diving deeper into robotics.

So what

Warehouse robotics, to be precise. As the company announced on its AboutAmazon.com blog on Friday, Amazon has just signed a deal to acquire Belgian “mechatronics solutions” company Cloostermans.

Amazon noted on its blog that it has been using Cloostermans technology “to help move and stack heavy pallets and totes or package products together for customer delivery” since 2019 already. Now Amazon is bringing the entire company (and its 200 workers) in-house, integrating it into Amazon’s Global Robotics subdivision.

Now what

Well, not “now” exactly. Amazon did note in its announcement that the deal to acquire Cloostermans “is subject to closing conditions” — presumably including regulatory approval. But Cloostermans itself is on board with the deal, with Frederik Berckmoes-Joos, the CEO of the privately owned company, saying he’s “thrilled to be joining the Amazon family”.

In contrast, Amazon did not say how much it is spending to acquire its new subsidiary — but even that absence of information is instructive. Presumably, if the price of acquiring Cloostermans were “material”, Amazon would have been required by SEC regulations to disclose it — so if they didn’t, it wasn’t.

Conclusion: Amazon just increased its lead over rivals in the field of money-saving warehouse automation technology, and didn’t pay a whole lot to do it. To my mind, that’s a good reason for Amazon stock to be going up today.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Rich Smith has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

This article was originally published on Fool.com. All figures quoted in US dollars unless otherwise stated.

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