Jeff Bezos is the world’s wealthiest person, with a fortune of over $117 billion. He’s also the CEO and President of Amazon.com (NASDAQ: AMZN), and the company’s largest single shareholder. Many investors read the news that Bezos sold more than $1.8 billion worth of his Amazon Stock this week, but it’s not the warning sign that some headlines have claimed it to be.
Rather than reacting to weaker than expected profits in the second quarter, Bezos is actually selling stock to fund his space exploration company.
Why Amazon Stock Offload is Not a Big Deal
Besides running Amazon, Bezos is also the founder of Blue Origin, a rocket and space exploration company that plans to offer commercial space flights in the near future.
Funding for the company comes largely from Bezos’ fortune. In a 2017 interview, the CEO said that “My business model right now for Blue Origin is I sell about $1 billion of Amazon stock a year and I use it to invest in Blue Origin.”
While his latest sale was almost double his usual offload, it’s still not a big deal considering that he owns 58.1 million shares in Amazon.
The recent sale is the first time that Bezos has sold Amazon stock since October 2018. The previous transaction was worth $33 million. One reason for a bigger sale this year could be that Amazon’s shares are performing so well. They were selling at $1,793.40 at the close of market on Wednesday. Price has increased 19.40% year to date, although it is starting to trend downwards with the current market uncertainty. Bezos may have planned the move to offset what could be some volatile months towards the end of 2019.
Is Amazon Still a Good Investment?
Amazon is one of the most valuable stocks on the market, but analysts think that it can go even higher. Out of 45 ratings recorded by FactSet, 41 analysts recommend a BUY. High earnings potential and a growing ecommerce market will create expansion opportunities for the company in the future.
Cloud computing is also a major area of expansion, as is Amazon’s digital streaming service. The average target price of $2,276 shows that there’s plenty of confidence for future growth.
Yes, Jeff Bezos just made his biggest ever sale, but Amazon stock is performing exceptionally well considering current market conditions.
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