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Amazon.com, Inc. (AMZN) CEO Sells $500m Shares on Payment Boom

Amazon.com, Inc. (NASDAQ:AMZN) Jeff Bezos

Amazon.com, Inc. is starting to wear another hat as the firm enters the payments market in its AWS segment. Business Insider reports that Amazon is ready to offer a service called Login and Pay that lets third-party retailers allow shoppers to use their Amazon payment and shipping information at check-out.

amazon.com Inc. (NASDAQ:AMZN) earnings

With Amazon Login and Pay, all you need to do is to use your Amazon login details when you visit a new store. The financial information (credit cards et. al) that you have on file at Amazon will be transferred to the new site and you don’t need to worry about filling in payment details again at checkout.

The Huge Prospects in Payments

Amazon is the largest e-commerce store stateside, the firm is into hardware (kindle and fire phone) it is into cloud services (AWS) it is into streaming, publishing, and just about everything. However, Amazon’s AWS business (that houses Payments) has been a key profit driver as the firm still struggles with profit in its e-commerce business. Patrick Gauthier, VP of external payments at Amazon told Business Insider that growth in the segment is in triple digits.

A ChannelAdvisor retail survey also shows that Amazon Payments is moving at a blazing speed to catchup with PayPal in the non-credit card payments market. PayPal controls 67% of the total Payments market with a 64% market share in the U.S. and a 71% market share in the U.K. Amazon Payments in coming up with a 15% total market share – 15% in the U.S. and 15% in the U.K.

In fact, Amazon Payments is well ahead of Google Wallet, Apple Pay and Square. Google Wallet has a 5% total market share; Square and Apple Pay both have 2% total market share in Payments.

If Business is this Good at Amazon Why is Bezo Selling?

However, the prospects of Amazon are beclouded with the possibility that insiders are dumping the shares of the stock. A news report holds that CEO, Jeff Bezos has sold 1 million shares of Amazon stock for about $532M this week.

Business has been very good for Amazon shareholders. In the last one year, the stock has gained 68.68%. It has gained an impressive 70.60% in the year-to-date period and the shares have gained 26.33% in the last three months. Hence, it is important that the market ask the all-important question about why Bezos is selling his shares.

Bezos might be selling his stock for a whole range of reasons that can’t be exhausted. Maybe he needs some cash, wants to invest in a new idea, he wants to give to charity or someone has discovered a $500M cure for baldness.

However, the market pays attention to this kind of news and it is more important when there is a pattern involved. In May 2010, Bezos sold 2M shares for $265M. In February 2014, he sold 1 million shares for about $351M. One year later, he is selling another 1 million shares for $532M. The value of Amazon share is rising and Bezos is smiling all the way to the bank.

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Victor Alagbe is a seasoned business and finance writer with a specialty in writing about how to invest for the long-term in healthcare, pharmacology, energy and tech stocks. His long-term focus is on stocks that provide a nice mix of growth and income. For the short term, he passionately writes about trading stock options for the excitement and leverage that stock options offer.