Best Buy shares dive on news of Amazon Geek Squad competitor

Key Points
  • Amazon is planning to launch a competitor to Best Buy's Geek Squad.
  • Shares of Best Buy slid 7.5 percent on the news.
  • Best Buy has a solid Q1 but Wall Street seems to fear whenever Amazon enters a new market.
Best Buy shares dive on news of Amazon 'Geek Squad' competitor
Best Buy shares dive on news of Amazon 'Geek Squad' competitor

Shares of Best Buy slid more than 7.5 percent on Monday following news from Recode that Amazon plans to launch its own Geek Squad service.

Best Buy's Geek Squad helps customers set up and troubleshoot gadgets.

Best Buy reported unexpected first-quarter growth in May, when shares hit an all-time intraday high of $60.14. It attributed its strong quarterly performance to new hardware and consumers' willingness to spend tax refunds.

Still, Wall Street seems to worry whenever Amazon steps on another company's turf.

According to Recode, Amazon is willing to send an "army of in-house gadget experts to offer free Alexa consultations as well as product installations for a fee."

This is similar to what Best Buy's Geek Squad offers for products ranging from smart home gadgets to appliances and cell phones. Best Buy's service fixes products even if they were purchased from other stores.

Best Buy doesn't disclose how much revenue its Geek Squad service generates per quarter, but the ability to teach consumers to use new electronics is going to become more and more important as the capabilities of gadgets increase.

If Amazon sinks its teeth into this business, it may drive customers to buy products from Amazon instead of from Best Buy.