Jeff Bezos, the founder of Amazon.com, has recently made an interesting move by gifting 1.7 million shares of Amazon stock, valued at approximately $240 million, according to filings with the Securities and Exchange Commission. This decision to divest from his company is not uncommon among founders, but for someone as wealthy as Bezos, traditional diversification rules may not apply.
Despite this reduction, Bezos remains the largest holder of Amazon stock, owning just under 10% of the shares. Following him, the largest institutional holders are Vanguard, BlackRock, and State Street, primarily through client accounts. These three financial powerhouses are not only major holders of various large-cap U.S. stocks but also serve as the largest providers of mutual funds and exchange-traded funds.
Fidelity and T. Rowe Price complete Amazon’s top five institutional holders. Together, these five entities control nearly 20% of the company’s outstanding stock, highlighting their significant influence.
While Bezos is the dominant individual shareholder, his ex-wife MacKenzie Bezos nee Scott holds the second-largest stake with approximately 3% of outstanding shares. The current CEO, Andy Jassy, owns a modest 0.02% of the stock, which still amounts to a substantial value of over $300 million.
It’s worth noting that Bezos once held approximately 2.3 billion Amazon shares at his peak ownership in 2000 when adjusted for stock splits, according to Bloomberg. Despite the conventional wisdom favoring diversification, Bezos has enjoyed remarkable growth in Amazon’s stock price, which has surged by an astonishing 3,800% since he began reducing his stake. In comparison, the S&P 500 has returned a modest 310% over the same period.
Bezos’ decision to divest from Amazon is a testament to his unique approach to wealth management and the recognition that traditional diversification rules may not always apply when you’re as rich as him. As Amazon continues to thrive and innovate, it will be interesting to see how Bezos chooses to navigate his financial holdings in the future.
High-Stakes Gamble: How Tech Founders’ Stock Holdings Could Have Made Them Even Richer
Bezos and Gates: Missing Out on Billions
It’s a classic tale of missed opportunities. Jeff Bezos, the founder of Amazon, has sold, gifted, and even lost some of his stock holdings, including a substantial portion in a high-profile divorce. If he had held onto all of his shares, they would currently be valued at a staggering $345 billion, surpassing the performance of an equivalent investment in the S&P 500.
This scenario is not unique to Bezos. Other tech founders, like Bill Gates of Microsoft (MSFT), have also seen their stock holdings diminish over time. In 1999, Gates held an impressive 1.6 billion shares in the software giant, as reported by FactSet. Fast forward to today, and his stake has dwindled to about 100 million shares.
While Gates is still estimated to be worth a hefty $117 billion, it’s hard not to wonder what could have been. Had he held onto those 1.6 billion Microsoft shares, they would now be valued at approximately $600 billion.
Microsoft: A Phenomenal Journey
What makes this even more intriguing is Microsoft’s undeniable success compared to the broader market. Over the past two decades, Microsoft’s shares have skyrocketed by a factor of ten since Gates last owned such a substantial stake. In contrast, the S&P 500 has only enjoyed a fourfold increase during the same period.
Despite Gates remaining the largest individual holder of Microsoft stock, his ownership now amounts to less than 2%. The most substantial shareholders of the tech giant include Vanguard, BlackRock, and State Street.
A Singular Strategy: Buffet’s Contrarian View
Warren Buffett, another legendary figure in the investment world, offers an unconventional perspective on diversification. He famously remarked that it can be wise to put all your eggs in one basket, as long as you closely monitor that basket.
With a net worth comparable to Gates and Bezos, Buffett clarifies that this strategy is only suitable for those who truly “know what they are doing” in the market. For the rest of us, diversification remains a protective measure against ignorance, as Buffett himself has emphasized.
Market Update: Amazon Outperforms
While all eyes are on the tech titans, it’s worth noting the current performance of their respective companies. At midday trading, Amazon stock experienced a 0.9% increase, demonstrating its resilience. In contrast, the S&P 500 saw a marginal decline of 0.2%, and the Nasdaq Composite remained relatively flat.