- Jeff Bezos wrote a letter in 2000 during the dot-com bust addressing Amazon's challenges
- Amazon's stock fell 80%, but fundamentals like revenue and customer growth improved
- Sales rose from $1.64B in 1999 to $2.76B in 2000, with losses shrinking significantly
A letter that Jeff Bezos wrote to shareholders during the dot-com bust in the early 2000s has resurfaced on social media, bringing attention to how the Amazon founder handled one of the company's most difficult times. The letter, which was written after Amazon's stock fell by about 80%, highlights Bezos' long-term outlook and his preference for operational fundamentals over immediate market sentiment.
The letter was written when Amazon stock witnessed one of the worst phases towards the end of the millennium amid an imminent global recession following the dot-com bubble burst. Despite acknowledging the stock slide, Bezos highlighted improving fundamentals, including good unit economics across core retail activities, rapid customer growth, rising revenue and shrinking operating losses.
In his letter to investors, Bezos addressed the situation from a long-term perspective, contending that while markets move in the near term, they eventually reward enduring companies.
Amazon's stock fell 80% in 2000.
— Jon Erlichman (@JonErlichman) February 15, 2026
Here's what Jeff Bezos told investors: pic.twitter.com/RB68Nbb2Hk
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'Brutal Year' In Markets
Bezos began his direct address to investors with a sobering admission: “Ouch. It's been a brutal year.” Amazon was one of the companies most severely impacted by the massive losses in market value caused by the collapse of technology stocks. For instance, according to a Guardian report, in June 2000, Amazon's shares lost 20% of their value on a single Friday, with the company's market capitalisation plunging to nearly $12 billion compared to around $40 million before Christmas in 1999.
However, Bezos maintained that the business was stronger than ever by almost every internal statistic, regardless of the sharp drop in share price.
The billionaire entrepreneur highlighted several operational enhancements in the letter, which presented a very different picture amid the sharp drop in stock prices. In 2000, Amazon's client base grew from 14 million to 20 million and its annual sales jumped from $1.64 billion in 1999 to $2.76 billion in 2000.
The company's move toward profitability was equally noteworthy. Pro forma operational losses in the United States dropped dramatically from 26% of sales in Q4 1999 to 6% of sales in the fourth quarter of 2000. Moreover, the losses in the US market shrank to a mere 2% of sales, the letter highlighted.
Additional data suggested that client engagement and unit economics were improving. Amazon has expanded beyond its initial focus on books, music, and videos, and the average annual expenditure per customer increased by 19% to $134.
The gross profit more than quadrupled to $656 million in 2000, from $291 million in 1999, up 125%. Approximately 36% of US consumers purchased from newer non-book categories, including electronics, tools and kitchenware.
Expanding Reach And Financial Resilience
Bezos also emphasised Amazon's expanding global presence, pointing out that foreign revenues rose from $168 million in 1999 to $381 million in 2000. The company's growing ecosystem was demonstrated by strategic alliances, such as one with Toysrus.com, which produced over $125 million in sales of toys and video games in the fourth quarter.
Furthermore, Amazon had $1.1 billion in cash and marketable securities at the end of 2000, up from $706 million at the end of 1999 due to early-year funding. This liquidity allowed the business to keep making investments in infrastructure and customer experience while also acting as a buffer against persistent market volatility.
Bezos emphasised Amazon's steadfast commitment to customer satisfaction at the core of his letter. The business received the highest score ever recorded for a service company at the time, 84, on the American Customer Satisfaction Index. This measure, according to Bezos, is the most obvious sign of long-term value generation.
According to renowned investor Benjamin Graham, the stock market is a "voting machine in the short term; a weighing machine in the long term”, Bezos noted in his letter to explain the sharp drop in stock prices despite positive financial metrics.
During the 1999 boom year, there was obviously a lot of voting and very little weighing. Bezos maintained that though markets change temporarily, in the long run, the companies that gain the trust of their customers eventually win out.
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