Amazon.com founder and Chief Executive Jeff Bezos trimmed his stake in the world's biggest online retailer to under 20 percent last year, a regulatory filing showed on Friday, a day after the company reported quarterly results.

The CEO's stake came down to 19.5 percent as of December 31, 2010, from 21.2 percent.

Thursday's results showed profit margins at the company were sliding, worrying investors and sending its shares down 9 percent.

Amazon shares fell about 8 percent to $169 on Friday before markets opened.

At least two brokerages cut their price targets on the company's stock, while two others raised them, but most stuck to their top ratings.

Owning the stock here requires trust and patience. We have seen Amazon go through investment cycles before and believe investment in growth is the right long-term strategy for the Internet, BofA Merrill Lynch said in a note.

Amazon said last year that it was spending on 13 new distribution centers, and on Thursday it said that more would follow.

The cost to bring those to full productivity would weigh on short-term margin, the company said.

We expect the company to continue to invest in increasing capacity to match growth, analyst Imran Khan at JP Morgan said as he lowered his fiscal 2011 pro forma operating margin estimates to 5.6 percent from 6.2 percent.

The company posted a slight dip in operating profit for the holiday fourth quarter despite revenue rising 36 percent, signaling the high cost of staying competitive in the highly promotional retail environment.

Khan, however, expects margin pressures to ease in the second half of the year.

Analyst James Mitchell of Goldman Sachs recommended investors buy Amazon, as valuations are still attractive.

The company is valued at 28 times Mitchell's 2012 non-GAAP estimates. Pitted against his estimate that Amazon could grow earnings about 30 percent a year for several years, it is still cheap.

Most investors have been willing to look through weaker-than-expected margins in 2H10 assuming leverage would resume in 2011, analyst Marianne Wolk at Susquehanna Financial said.

(Reporting by Nivedita Bhattacharjee and Renju Jose in Bangalore, Editing by Ian Geoghegan and Gopakumar Warrier)

Jeff bezos Amazon