Amazon.com Inc was in the eye of the storm last week when Wal-Mart made a move to buy Jet.com for $3B. WalMart made a move to acquire Jet.com in bid to shore up its digital capabilities, strengthen its online presence, and in order to get a bigger slice of the ecommerce market. Pundits have maintained positions on both sides of the argument on whether Walmart’s purchase of Jet will have an effect on Amazon or not.
It is still too early to make predictions on the impact that Wal-Mart’s purchase of Jet.com will have on Amazon. However, the fact that WalMart is getting stronger in the ecommerce field appears to be pushing a sell-side movement on Amazon’s stock. Interestingly, the selloff is starting from the very top because CEO Jeff Bezos is leading investors to sell the shares of the firm.
Jeff Bezos sells record number of Amazon shares
Latest news report on Amazon reveals that Jeff Bezos sold a massive amount of his holding in the firm last week. Jeff Bezos sold one million shares for about $757M last week to beat the $671M worth of shares that he sold in May. The CEO of the ecommerce giant reportedly sold the shares between $750.35 and $765.01. Shares of Amazon are up 0.48% to $770.20 an ounce as at 10:04AM EDT today.
The shares of the e-commerce giant has been benefitting from bullish goodwill after the firm reported better than expected second quarter results. The firm reported that its revenue enjoyed a 31% annual increase to $30.4B. More so, the firm reported adjusted profit per shares of $1.78 up from $0.19 per share in the year ago quarter.
The shares of the firm have had a decent bullish run with monthly gains of 3.34% and YTD gains of 13.86%. Hence, investors are staying put with the hopes of recording bigger gains in the remaining quarter of the year. However, the news of Walmart’s purchase of Jet.com gave Jeff Bezos a case of the jitters and he didn’t hesitate to sell part of his holding in order to take some money off the table.
Bezo’s share sale might not be connected to Walmart’s move
Despite last week’s stock sale, Jeff Bezos still has 80.9 million shares of Amazon worth more than $61B. Hence, the fact that Bezos sold 1 million shares might be immaterial to the firm and other investors. A deeper dig into the circumstances surrounding the stock sale reveals that Bezos had made a commitment to sell the shares through a 10b5-1 plan. The 10b5-1 plan is an SEC regulation that allows company insiders to sell shares on a predetermined schedule in order to avoid being accused of insider selling.
Hence, Bezos would have had to sell his one million shares last week irrespective of the stock’s trading price. More so, he would have been under obligation to sell the shares irrespective of whether WalMart was buying Jet.com or otherwise. In the final analysis, Amazon investor are carrying on without paying much attention to Walmart’s purchase of Jet.com and Jeff Bezos’ stock sale – Amazon is secure in its market lead and Walmart will do more than a $3B acquisition before it can catch up.