Amazon Under Pressure As Future Retail Petitions Court To Abort Arbitration – Report

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Amazon’s (AMZN) tussle with Future Retail has taken an unprecedented turn. Reuters reports that the Indian retail outlet has asked a New Delhi court to abort arbitration proceedings in Singapore, terming it illegal. AMZN shares jumped 2.21% to close at $3,408.09 on December 3.

Amazon is a U.S. company that offers online retail shopping services. It also generates revenues from cloud computing. Amazon’s earnings report for Q4 2021 is scheduled for February 03, 2022.

Amazon vs. Future Retail

In its defense, Future Retail argues that the proceedings in Singapore are based on a 2019 deal that India’s antitrust agency suspended. The Competition Commission of India suspended the 2019 deal, arguing that Amazon suppressed valuable information while seeking approvals.

The legal standoff in India and Singapore stems from Amazon using terms of its $200 million investment in Future Retail to block a sale of its retail assets.

Amazon has dubbed the asset sale illegal, alleging it amounts to a breach of certain contracts. The retailer insists the deal has no legal existence in India as it does not have antitrust approval.

A Singapore arbitration panel is hearing the case, but Amazon and Future Retail have been fighting parallel cases in Indian courts. The U.S. retailer has already told the Singapore arbitrator that the CCI’s suspension of the 2019 deal does not make the transaction void, as it has allowed Amazon to reapply for clearances.

Stock Rating

Last month, Cowen & Co. analyst John Blackledge reiterated a Buy rating on Amazon and raised the price target to $4,500 from $4,300, implying 32.04% upside potential to current levels. According to the analyst, Amazon is his top pick for 2022. He expects sales growth to accelerate in the second quarter as e-commerce comps ease.

Consensus among analysts is a Strong Buy based on 30 Buys. The average Amazon price target of $4127.50 implies 21.11% upside potential to current levels.

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