Amazon CEO Jeff Bezos sold more than $1B worth of stock this week

https://www.theverge.com/2017/11/3/16604990/amazon-ceo-jeff-bezos-stock-sale-1-billion

by nwrk • 9 years ago

97 79 9 years ago

fataliss• 9 years ago

That tax season will hurt!

clarkevans• 9 years ago

The taxes (what, 20% capital gains?) seems an excellent deal for the ecosystem where he grew his company: a stable political system, strong asset protection enforced by strict laws, an educated workforce in a relatively unpolluted environment, etc.

loeg6• 9 years ago

20% capital gains rate + 3.8% NIIT to the federal government.

(And another 7.9% to WA under governor Inslee's December 2016 proposal — which, to be clear, has not actually become law.)

jbusma2• 9 years ago

Looking up Bezos' salary data, I'm wondering why chose to take a salary of ~$81,840

If he was under the $37,950 mark, his Long Term Capital Gains rate would have been 0%

Consultant324523• 9 years ago

20% does seem like a good deal for all those things, but it's important to remember that the top 20% already pays 95% of the taxes. So if those things are good they're only good because he's already been paying for them.

So if you enjoy the stable political system, strong asset protection, your free education, and relatively unpolluted environment it might be time to add Jeff Bezos to your Christmas card list to thank him for funding all that for you.

grandalf4• 9 years ago

I would much rather that Bezos be allowed to keep all of his capital gains but have appropriate antitrust enforcement step in and reduce Amazon's market power a bit.

The recent upsurge of counterfeit products are evidence that Amazon is abusing its market power to the point of harming consumers.

refurb• 9 years ago

Pretty sure offering those things to Bezos didn't cost the gov't $200M.

And at any rate, most of the money will probably go for an airport that will never be used in some influential senator's state.

charlesdm• 9 years ago

Who says it's not going into a tax free foundation or some sort of trust? Don't assume he's paying taxes if there is a way to avoid.

thinkling• 9 years ago

If you wanted the money to go to your foundation, you would donate the stock to the foundation and sell it there. If you sell it first and then donate the cash, I believe charitable donations are phased out as deductions above a certain income level. (Or maybe the AMT wipes them out?)

DiThi• 9 years ago

He sells $1B every year to fund Blue Origin. Source: https://news.ycombinator.com/item?id=14047650

bmcusick• 9 years ago

Correct

https://mobile.nytimes.com/2017/04/05/science/blue-origin-ro...

adventured4• 9 years ago

$94.6 billion net worth at present per Bloomberg.

I know he is basically guaranteed to be running all of these sales off a sale schedule set far in advance for obvious reasons. However, I'd probably be doubling up those $1 billion sales until/unless this market gives out.

Raising $6 or $10 billion - enough to fund Blue Origin for maybe a decade - by selling out of a $94 billion base, sure beats doing the same out of $26 billion (where his net worth was at just ~33 months ago).

jamestimmins• 9 years ago

A $68 billion increase in net worth in 33 months must be some kind of record.

hkmurakami2• 9 years ago

Well in real terms Bill Gates in the dot-com era might still have the edge.

alexasmyths2• 9 years ago

All of this is entirely dependent on whimsy.

Amazon P/E is basically in the clouds.

They and Telsa in some ways are basically impossible to value.

So, people make difficult guesses.

Though I agree that because AMZN could probably simply 'turn on profit' at any time, and so the classical P/E is not a great measure ... at the same time ... a small dip in something could ruin them.

It only takes just a little bit of return to 'normal P/E' to wipe most of that out.

It's all emotion and intellectual pontification right now, and that's a crazy place to own a stock.

tradersam• 9 years ago

though I agree that because AMZN could probably simply 'turn on profit' at any time

I'm confused—Amazon is profitable already, no?

swendoog• 9 years ago

I can't help but wonder what it's like to have that kind of money.

Does such a person ever wake up, and wonder how the dice rolled so amazingly in their favor?

Or do they wake up and stand proud, recognizing that they are so successful because of their own hard work and intelligence?

Do they ever think about how insane life is that they ended up with 94 billion, while some people are starving?

I'm not making any moral projection here. I'm not saying there's anything right, or wrong, about that situation. I'm just genuinely curious what it feels like to be in their shoes.

jaxn• 9 years ago

There are people in the world who’s life would be more transformed by your wealth than your’s would be by Bezos’.

How did you wake up this morning?

Also not making a moral projection here. We just tend to look up instead of down.

adventured4• 9 years ago

Bezos has taken to recently calling his immense wealth, his "Amazon lottery winnings." Which gives you an indication that he is fully aware of the role good luck has played in his life. I'm sure it's also meant to disarm or preempt criticism to an extent, Warren Buffet has done the same thing the entire time he has been famous & wealthy (using various explanatory concepts such as "the ovarian lottery," and joking about how he'd be dinosaur lunch in a different time given how a vicious carnivore might respond to his capital allocation skills). To the extent that Bezos's wealth is particularly wildly outsized, I'm sure - based on what he has said - that he recognizes it as being well beyond just the result of hard work and intelligence (both of which he usually gets credit for).

whatyoucantsay• 9 years ago

Does such a person ever wake up, and wonder how the dice rolled so amazingly in their favor?

More likely they wake up thinking about how to further weight dice rolls into their favour, even those stretching years into the future.

losteverything• 9 years ago

I'm just genuinely curious what it feels like to be in their shoes.

The contemplation of this question satisfies ones need for introspection. Whether it's Bezos, or someone you are not there is great value in trying to answer this.

Struggle and pain and want is cleansing. Constant success can be a house of cards for children.

Wealth, enormous, is a burden. Just making it is freedom. Imo.

As he cant understand our life anymore we cant understand his.

cisanti• 9 years ago

I don't know the answer, but how do you feel every morning waking up knowing your top 1% of the world and top 0.xxxx% of the history of all man kind? I don't think you think about it too much and keep doing things... Maybe even wine a bit :))

prewett• 9 years ago

My initial question was how did he sell $1B and not affect the share price substantially. And sure enough, the share price did drop a bit. But average trading volume is about 2 billion shares, which is about $2B. It's pretty crazy that the market has so much liquidity that $2B of AMZN changes hands every day, and that it could soak up a $1B sale and barely change the price.

mabbo• 9 years ago

Because the market knows ahead of time he's going to do this- it's pre-announced. Any shift caused by it would happen weeks or months ahead of time, slowly, quietly.

And so it's no big deal the day it actually happens.

aqsheehy• 9 years ago

Markets are efficient

justinjlynn• 9 years ago

In the large? Yes, generally and generically speaking they are excellent at pricing in the very short term. On the small they have all sorts of failure modes and perversions - there is no such thing as "the market" there are, however, market conditions in any given area which may or may not follow certain patterns of activity.

olympus2• 9 years ago

Minor correction: Google finance shows average volume at 3.7M shares, which at $1,100 per share is about $4B daily. Selling a billion dollars is still a significant chunk, so your point stands.

Mikeb85• 9 years ago

Over 3 days of selling (according to the article), that's only an average of about 8% of daily volume.

sudhirj• 9 years ago

To prevent any accusations of insider trading, these sales tend to be announced months in advance and scheduled, so any movements on the sale day are more likely to be naieve investors reacting.

jliptzin• 9 years ago

Yea but they can cancel those trades at any time. They can set up a weekly sale of a huge chunk of stock, cancel it every week while the company is doing fine, then right before a terrible quarter hits, allow the sale to go through. This does not stop insider trading.

joering22• 9 years ago

I witnessed exchange of $300MM of stock for cash in late 90s at my job. You are correct that noone sels $1B of stock and doesn't make dent in trading value.

So to do that right, you get on the phone with broker who agrees to buy such quantity. You put order SELL at $5 and 1,000,000 shares ONLY, which means noone can buy just 10 shares: you take 1MM or none. Once your call reach the market, within seconds the other party puts a BUY call at 1,000,000 shares. 10 seconds later the whole transaction is done. It doesn't affect market at all, because the price fluctuates based on supply and demand. In our scenario X of supply met X of demand immediately, so the market didn't tick. Of course such large volume might be some sort of a signal (buy or sell, depends on party that looks at it), but will not trigger serious movement of stock, immediately.

jpatokal• 9 years ago

That may have been the case in the 1990s, but isn't 10 seconds an eternity in today's HFT world? You'd need to arrange the sale off the exchange.

thisisit• 9 years ago

Because of the order type.

Market Orders soak up all the liquidity as they need to be executed at the best price available. So, if the price is at $10 and I dump a huge amount of shares, it will go through the bids..$10, $9.9, $9.8...you get the idea.

Limit Orders kind of provide liquidity. It doesn't execute unless a certain condition is met. So I can dump a large sell at $10, it won't change the price. Anyone in the market can bid into $10 and buy shares if they want.

So, trading volume doesn't matter, order type matters. If Bezos had dumped his shares in open market it would cause the price to change dramatically. People will take it as a sign and jump out like rats fleeing a sinking ship.

Most of these trades are pre-planned and are limit orders.

The data has not been updated for the November sells you can see all the Amazon insider trades here (including the March selling noted in the article): http://www.nasdaq.com/symbol/amzn/insider-trades

Most are automatic sell and are pre planned. Disposition are trades which are off market transaction, selling or buying, directly with the company.

candiodari• 9 years ago

I think you'll find limit orders limit the price while they're executing. Say I place a $10 million MSFT limit buy order at $80, that means that until my $10 million is used up (the order is "filled") the price cannot drop below $80.

Conversely if I place a $1B sell order for $1100 (ought to be close to what happened here) the price cannot rise above $1100 until that amount of money has been extracted out of the market.

eighthnate• 9 years ago

Because it was probably traded book to book or via the back-end pools. Most likely bezos' broker called other brokers/hedge funds/etc to gauge interest and one or few of them agreed to take on the position.

This happens all the time when the big boys want to open/close/rebalance large positions within a short time frame.

Amazon CEO Jeff Bezos sold more than $1B worth of stock this week

Related Stories