Investors question Amazon's future after Bezos announces divorce




FILE PHOTO: 2018 Vanity Fair Oscar Party - Arrivals - Beverly Hills
FILE PHOTO: 2018 Vanity Fair Oscar Party - Arrivals - Beverly Hills  

By David Randall

NEW YORK (Reuters) - Amazon.com Inc (AMZN.O) shares see-sawed on Thursday as investors questioned how the impending divorce of company founder Jeff Bezos would affect his control of the most valuable company on Wall Street and its ambitious expansion plans.

Bezos, whom Forbes lists at the world's richest person worth an estimated $136.2 billion, said via Twitter on Wednesday that he and his wife of 25 years, MacKenzie, will divorce. Amazon shares were down less than 1 percent in afternoon trading on Thursday, after dipping earlier in the session.

The split throws into question how the couple will split their fortune, which includes an approximately 16 percent ownership stake in Amazon's roughly $811.4 billion market capitalization. Divorce laws in Washington state, where they live, hold that property acquired during a marriage is generally divided equally between spouses.

Most analysts and fund managers are largely sanguine and say the divorce will not lead to any significant change in the company's leadership or its growth prospects.


Prominent short-seller Doug Kass, however, who runs hedge fund Seabreeze Partners, said he sold his stake in Amazon on news of the divorce. That was after initially buying a stake in late December and naming Amazon among his "best ideas list."

"Is it premature to ask what happens to Amazon when Jeff Bezos chooses to turn over the day-to-day running of the company he founded?" he said. "His announced divorce gives me pause for thought."

Robert Bacarella, portfolio manager of the Monetta fund, said that while he is not changing his investment in Amazon, he expects other growth-focused portfolio managers may trim their stakes due to concerns about the divorce's impact.

"This is such an over-owned company and this gives them an excuse to say 'Maybe I'll trim some back because it adds a new question mark'," he said.

Bacarella, however, said he is not concerned because even if MacKenzie Bezos liquidated her expected 8 percent stake, there would be no fundamental reason behind the sale. Any impact would be short-term in nature.

"Unless you worry that he will get so distracted by the divorce that he cannot manage the company, this will be a non-event," said Michael Pachter, an analyst at Wedbush Securities in Los Angeles. "He is given control of the company because shareholders like him and his vision, not because he has 50 percent of the stock."

Thomas Forte, an analyst at D.A. Davidson, said questions about the future of the company due to the divorce are legitimate due to Jeff Bezos' outsized influence on its value. Should he leave the company for any reason, its shares would likely immediately fall more than 10 percent, he said.

"His influence on the company is as a significant as if he had super-voting shares because of his track record and the way he runs the company as if he owned the whole thing," he said.


(Reporting by David Randall; Editing by Dan Grebler)

COMMENTS

More Related News

Google spends big on U.S. lobbying amid antitrust, bias battles
Google spends big on U.S. lobbying amid antitrust, bias battles

Google said in a quarterly disclosure to Congress that it spent $4.9 million on lobbying activities during the fourth quarter, slightly above $4.4 million in the same period a year ago. The 2018 total also surpassed $18.04 million spent on lobbying in 2017, according to tracking of the filings by the nonpartisan Center for Responsive Politics. Google declined to comment beyond its filing.

Blue Origin to make 10th flight test of space tourist rocket
Blue Origin to make 10th flight test of space tourist rocket

Blue Origin, the rocket company headed by Amazon founder Jeff Bezos, is poised to launch the 10th test flight of its unmanned New Shepard rocket on Wednesday as it competes with Virgin Galactic to become the first to carry tourists on brief visits to space. Virgin Galactic, headed by British billionaire Richard Branson, is also working on a vessel of its own to carry tourists to space. On December 13, 2018, Virgin Galactic's SpaceShipTwo, VSS Unity, flew higher than it ever had before, surpassing what the US Air Force considers the boundary of space, and marking the first manned flight to space from US soil since 2011.

The Roomba 690 is on sale for cheaper than its Black Friday price right now
The Roomba 690 is on sale for cheaper than its Black Friday price right now

Did you know you can pick up a brand new iRobot Roomba for less than $250? It's true. The iRobot Roomba 690 robot vacuum with Wi-Fi connectivity is now on sale for just $247.99, or $127 off its retail price, on Amazon. This new sales price is actually a few dollars cheaper than its Black Friday sales price back in November. In fact, this is almost the lowest price Amazon has ever offered for this robot vacuum, so take advantage of this deal while it still lasts. SEE ALSO: Turn your Roomba's trip around the house into a playable 'Doom' map The iRobot Roomba 690 is a sleek and premium robot vacuum with three stages of cleaning for hardwood floors, carpets, and area rugs. Say goodbye to...

Brazilian leader at odds with Davos focus on environment
Brazilian leader at odds with Davos focus on environment

DAVOS, Switzerland (AP) - Brazilian President Jair Bolsonaro pledged to work "in harmony with the world" to cut carbon emissions, aiming to quell international concerns that his country, the main custodian of the oxygen-rich Amazon, could put economic interests over environmental ones.

Amazon reveals
Amazon reveals 'anti-robot vest' to protect workers from machines

Amazon has given its warehouse workers new tech-enabled vests to protect them from robot-related crashes.  The e-commerce giant's new "Robot Tech Vest" is equipped with sensors to alert Amazon's robots to a human's presence forcing them to slow down to avoid collisions. The vests, which look similar to a utility belt, were designed to allow warehouse workers and engineers to easily retrieve fallen items within tightly packed aisles and repair robotic systems. Brad Porter, robotics vice president at Amazon, told TechCrunch that it replaces a previous system that required employees to block out areas of the warehouse where they planned to operate. "What the vest allows the...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply

Comments

Top News: Economy

facebook
Hit "Like"
Don't miss any important news
Thanks, you don't need to show me this anymore.