Jeff Bezos to sell $4B worth of Amazon shares
What's the story
Jeff Bezos, the founder of Amazon, has filed plans to sell around 15 million shares in the tech giant. The sale is estimated to be worth some $4.1 billion at current market prices. The move comes after Amazon's stock price hit an all-time high on Monday, following strong second-quarter earnings and robust growth in its cloud computing business.
Market impact
Amazon's stock price surges nearly 20% this year
Amazon's shares have surged nearly 20% this year, significantly outperforming the S&P 500's 12% gain.
The company's market value briefly crossed the $3 trillion mark on August 3, closing over 4.5% higher at a record price.
However, in after-hours trading, the stock dipped about 1%, following Bezos's filing to sell his shares under a Rule 10b5-1 trading plan adopted in November last year.
Sale details
Bezos's stake to drop to 869 million
The SEC filing shows Bezos plans to sell 15 million common shares with a total market value of about $4.07 billion, based on Monday's closing price. The shares were acquired as founder stock in July 1994.
If completed, Bezos's stake would drop from 884 million shares to 869 million, or roughly 8.1% of Amazon's total outstanding shares.
Even after the sale, his remaining stake would be worth around $244 billion at current prices.
Trading strategy
What is Rule 10b5-1?
The Rule 10b5-1 is a regulation from the US SEC that allows insiders at public companies to set up a plan to sell their shares in advance.
Under this rule, major shareholders can schedule the sale of a fixed number of shares at a predetermined time, helping them avoid accusations of insider trading.
Many company executives use 10b5-1 plans for this reason.
Previous transactions
Bezos has regularly sold Amazon stock in recent years
Bezos has regularly sold Amazon stock in recent years, often through prearranged trading plans.
He recently sold 25 million shares for $5.7 billion between late June and July-end.
Since 2002, he has unloaded about $50 billion worth of Amazon stock, usually directing the proceeds toward Blue Origin and AI ventures through Bezos Expeditions.
Financial performance
Amazon's Q2 earnings beat reignites investor enthusiasm
The filing comes after Amazon's Q2 earnings beat, which reignited investor enthusiasm.
The company's revenue rose 20% to $200.61 billion, operating income jumped 43% to $27.5 billion, and AWS revenue surged 36.7% to $42.2 billion, its strongest growth since 2021.
AWS generated $16.6 billion in operating income, accounting for 61% of companywide profits.