Costco Wholesale Corporation (NASDAQ: COST) shares dropped Friday, along with basically any other retailer of note, after Amazon announced its plans to buy Whole Foods. Goldman Sachs had downgraded Costco from a buy to neutral and reduced its price target to $176 from $197.
Shares went down $12.10, just under 7%, to 167.90 by 3 pm on Friday. This comes on the heels of a potentially sector shattering deal and news that Goldman Sachs has downgraded the company from a buy to neutral. Investor confidence in the sector is shook and the market will likely reflect that fact for the coming weeks, with everybody not Amazon and Walmart scrambling to come up with a way to stay afloat and the aforementioned two trying to find new ways to topple one another.
Whole Foods (NASDAQ: WFM) is up 30% and Amazon (NASDAQ: AMZN) is almost breaching the 1000 threshold again with a modest 3.6% increase after the news. For comparison, Wal-Mart (NYSE: WMT) is down 5%, Kroger (NYSE: KR) is down 9.5%, with European retailer Koninklijke Ahold feeling the burn as well, down 8%.
The far reaching effect of this deal are just starting to be felt, with many more twists and turns coming soon.