In many ways, the announcement that Amazon.com Inc. (AMZN) founder, Jeff Bezos, was stepping back from his role of the company’s CEO on July 5th barely caused a splash in the commercial world, not least because it was one of the market’s worst-kept secrets.
As a result, Amazon’s share price enjoyed incremental growth of +2.17% in the immediate aftermath of the Bezos announcement, while the firm also ensured some kind of continuity with the boss of their cloud-computing arm, Andy Jassey, taking over the reins.
But what exactly does this mean, and how will it impact both the company and markets in the longer-term?
Bezos Steps Down - What Do You Need to Know?
Bezos will formally step down on July 5th, with his successor Jassy (who currently oversees the most profitable arm of Amazon’s multi-layered venture) set to take over immediately.
Interestingly, this date was chosen as it holds immense sentimental value for Bezos, as it was on July 5th, 1994 that Amazon was incorporated. By the time he officially leaves the post of CEO, Bezoz will have chaired the business for 27 hours, during which time he has become the company’s main shareholder and the richest man in the world.
More specifically, it’s estimated that Bezos still owns 51.7 million Amazon shares, with this forming the bulk of his $198 billion fortune.
From July 5th, Bezos will transition to the role of executive chairman of Amazon’s board, while he’s expected to dedicate more time towards initiatives like the Bezon Earth Fund and his Blue Origin spaceship company.
He may also focus on endeavours such as The Washington Post and the Amazon Day 1 Fund, so it’s unlikely that he will have much spare time on his hands in the short, medium or longer-term.
The Future for Amazon and Investors
As we’ve already said, Amazon’s share price was largely unmoved by the decision, while this recently reached a nine-month high of $3,489.24 on June 18th.
This will certainly have been noticed by individual stock traders and those who practice indices trading, particularly with Amazon featured across a number of blue-chip indexes including the tech-led Nasdaq 100.
At the same time, the business has reported a market cap value in excess of $1.76 trillion, with this also continuing to rise as the business looks to build on the immense success achieved through 2020 against the backdrop of the coronavirus.
With these points in mind, and given the continuity provided by the subsequent appointment of Jassy, it seems unlikely that the departure of Bezos will have an adverse impact on Amazon’s commercial performance, share price or revenues.
In fact, a more serious risk may be posed by the inflated nature of its share price when compared to earnings, with this typical across a broad range of blue-chip tech stocks and increasing the risk of the tech bubble bursting in the future.
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