Amazon founder Jeff Bezos’ divorce may affect his stake in the firm
Almost 95.0% of Mr Bezos’ net worth is tied to the e-commerce colossus, so the lawyers handling the divorce would need to find a workaround solution on the division of assets.
Just days after Amazon became Wall Street’s most valuable company, surpassing Microsoft, another round of Amazon news came to surprise investors: Amazon’s founder and chief executive Jeff Bezos and his wife MacKenzie Bezos will be divorcing after 25 years of marriage, the couple said in a post on Twitter on Wednesday.
Mr Bezos, 54, is currently the world’s richest man, with a fortune of US$160 billion due to his 16.3% stake in multi-billion dollar tech firm Amazon.
Almost 95.0% of Mr Bezos’ net worth is tied to the e-commerce colossus, so the performance of Amazon’s stock has a direct and significant impact on his wealth. And because his net worth is tied to his stake in the firm, the divorce which would usually lead to a division of assets between the duo, may see changes on Mr Bezos’ stake in the firm.
Mr Bezos had met his wife before he founded Amazon. The two were engaged after three months of dating and married three months afterwards, according to a Vogue article. The couple has four children. It is likely for the duo to settle their divorce privately.
Mixed views on Bezos’ ownership in Amazon post-divorce
Analysts were mixed in their views on how the impact on the divorce could potentially change the stake Mr Bezos has in Amazon. Some said the divorce should have no material impact on the company and its shares, while others view that the ownership in Amazon could change.
It may be difficult for the Bezos to split up their wealth without dipping significantly into their Amazon shares, said Jordan Neyland, an assistant professor of law at George Mason University, in a CNBC report.
The likely scenario could be a buyout of Mrs Bezos shares or for her to retain the shares. Otherwise, another likely option would see Mrs Bezos keeping the stock and Mr Bezos retaining the voting rights.
It is likely for Mr Bezos to find a way to retain voting power in Amazon, and he would need to find a structure or may have already come to an agreement with his spouse prior to the twitter announcement.
If the couple decides to file for divorce in Washington state, where Amazon is headquartered, the state law says the assets accumulated throughout the course of the 25-year long marriage would be owned by them both. Only if the two has a prenuptial agreement, then the assets would not be equitably divided.
Amazon’s stock has risen more than 40.0% year-to-date, trading at US$1,169.47 on December 29, 2017.
Amazon’s shares shrank 0.33% or US$5.42 in afterhours trading, to US$1,654.00, at 10.51pm New York time.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.
No representation or warranty is given as to the accuracy or completeness of this information. Consequently, any person acting on it does so entirely at their own risk. Please see important Research Disclaimer.
Please also note that the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
See an opportunity to trade?
Go long or short on more than 13,000 markets with IG.
Trade CFDs on our award-winning platform, with low spreads on indices, shares, commodities and more.
Live prices on most popular markets
- Forex
- Shares
- Indices
See more forex live prices
See more shares live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
See more indices live prices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.