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

There Are Now Three People Worth Over $100 Billion
There Are Now Three People Worth Over $100 Billion

There Are Now Three People Worth Over $100 Billion

The World Now Has Three People Worth More Than $100 Billion Each
The World Now Has Three People Worth More Than $100 Billion Each

Bernard Arnault, Europe's richest person, just joined Jeff Bezos and Bill Gates in the world's most exclusive wealth club with a fortune of at least $100 billion. Arnault, chairman of LVMH, entered the ranks of centibillionaires Tuesday as the luxury-goods maker climbed 2.9% to a record 368.80 euros a share. His net worth has increased almost $32 billion this year, the most on the 500-member Bloomberg Billionaires Index.

As Amazon Air Threat Grows, First Cracks in Carrier Relationships Appear
As Amazon Air Threat Grows, First Cracks in Carrier Relationships Appear

Other carriers may follow FedEx's lead and reassess their relationship with the e-commerce giant.

Today
Today's best deals: $7 Alexa smart plugs, $13 color smart lights, $25 Fire TV Stick, $15 Wi-Fi extender, more

We're kicking off the new week with a phenomenal roundup of the best daily deals we could find. Highlights include top-rated Alexa and Google enabled smart plugs for just over $7 a piece when you buy a 4-pack and clip the $3 coupon, renewed Fire TV Sticks for $24.99, the best-selling TP-Link Wi-Fi range extender on Amazon for just $14.99, brand new iPads at their lowest prices of all time, the Apple Watch Series 3 in both sizes at all-time low prices, $13 color LED smart light bulbs that are just as good as $50 Philips Hue bulbs, a 10W fast wireless charging stand for only $8.99, $70 Nintendo Switch Pro Controllers for just $49.99 a piece, the best-selling Instant Pot at its lowest price...

Apple
Apple's 128GB iPad is somehow cheaper right now than it was on Black Friday

When Apple's current-generation iPad tablets went on sale at deep discounts for Black Friday last year, people flipped out. It makes sense of course, since truly deep discounts on Apple products are so rare. Well, get ready to flip out even more because Amazon somehow just gave the Apple iPad an even deeper discount! The 128GB model that was $80 off on Black Friday is now a whopping $101 off, slashing the price all the way down to just $328. That's an all-time low, and we doubt we'll ever see a better bargain on an iPad. If you don't need that much storage, you can also still get the 32GB model for just $249, which is also an all-time low.Here are the highlights from the product page: *...

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.