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One of the world’s richest men now has more cash on hand.
Jeff Bezos sold about $2 billion worth of Amazon stock on Tuesday and Wednesday, the latest in a series of sales that began last week. The former Amazon CEO has sold about 36 million shares worth more than $6 billion so far this month, according to regulatory filings..
And there will probably be more to come. Amazon’s executive chairman plans to sell a total of 50 million shares by January 31, 2025, according to Amazon’s latest annual report.
Experts say the sale makes sense. Amazon’s stock price is rising, and Bezos’ recent move from Seattle to Miami means he can sell without worrying about Washington state’s new capital gains tax.
“Now is the perfect time to take this action,” said Neil Saunders, managing director at analytics firm GlobalData.
Why now?
Amazon’s stock price soared. The e-commerce company’s stock has risen about 70% over the past year, outpacing the S&P 500, which has risen about 20% during that time.
Sanders said this allowed the Amazon founder to reap “high returns” nearly three years after stepping down as CEO (though Bezos, as executive chairman, was able to continue to invest in “new products and early initiatives”). ).
“This is part of the process of exiting Amazon,” Sanders said. “That doesn’t mean he’s giving up. He’s always going to be the founder. But he’s not running that business anymore. So this means he’s loosening his relationship with Amazon, and Amazon is becoming more… I think it’s part of helping them become independent.”
And since most of Bezos’ wealth is tied to Amazon, it makes sense for him to diversify his holdings, said Michael Roberts, the William H. Lawrence professor of finance at the Wharton School at the University of Pennsylvania.
“From a risk management perspective, it’s not a good strategy to put all your eggs in one basket,” he says.
Bezos sold his shares shortly after acquiring the Florida property. The billionaire said in November that he was moving to be closer to his family and operations at his rocket company, Blue Origin, and because his fiancée, Lauren Sanchez, “loves Miami.”
The move to Florida also allows Bezos to avoid Washington state’s new 7% capital gains tax, which applies to the sale of assets such as stocks and bonds worth more than $250,000.
Before the recent flurry of Amazon stock sales, Bezos last sold shares in 2021. That was before new state taxes went into effect the following year. Until then, Amazon’s founders regularly sold Amazon stock to fund projects like Blue Origin.
Bezos has likely already saved more than $430 million by waiting until he moved to Florida to unload more stocks.
Amazon did not respond to requests for comment from USA TODAY.
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Is this level of offload normal?
Yes and no.
Sanders said it’s “very normal” for founders with large stakes to offload from time to time. But $6 billion is a big number no matter how you look at it.
This “underlines Amazon’s strength,” he says. “We can dispose of a significant amount without affecting the stock price.”
Sanders said if Amazon’s price were more volatile, fewer people would want to pick up its stock, which would hurt the stock price.
Mr. Bezos is expected to sell more than 14 million additional shares under a pre-planned sale plan, worth more than $2 billion at today’s stock price. The sale will leave Bezos with more than 900 million Amazon shares.
Roberts of the University of Pennsylvania pointed out that Bezos is worth almost $200 billion, saying, “While that’s a very large number, it’s only a fraction of his total wealth.” “It’s not like he’s liquidating all of his Amazon holdings. This is small potatoes.”
What does Bezos’ stock sale mean for Amazon?
Sanders says it’s only a small amount.
“Jeff Bezos is not selling these stocks because he no longer has confidence in the company,” he said. “It’s just someone cashing out their stock, and that’s very understandable.”
Sanders added that this offloading “makes absolutely no sense” as far as Amazon shoppers are concerned.
Amazon stock was down 1.2% Friday morning, trading at $167.69.
What will Bezos buy with $6 billion?
Where that $6 billion will go is anyone’s guess.
Sanders said he doesn’t expect Bezos to buy real estate in Florida because he “already has enough money to do so.”
The 60-year-old has already purchased two mansions in Indian Creek Village, one of the most affluent areas in the country.
Sanders said Bezos “likely has other big plans and investments he wants to make with that money.” But “I don’t know what he’s planning.”
Bailey Schultz is an investigative and general assignment reporter covering money issues.
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