Move over, Bill Gates. Someone else has taken your crown as the richest person in the world, if only for a short while. Yesterday morning Amazon founder and CEO, Jeff Bezos, briefly became the richest man on the planet. Bill Gates is worth an estimated $90 billion by Forbes. Amazon.com’s stock started the session strong, trading at $1067 per share, which was up 1.5% from the previous day’s close pushing Jeff Bezos’ net worth to $91 billion. In order for Bezos to keep the lead Amazon stock (AMZN) would need to have held on to the gain and continue to trade at $1064 or higher. However, it wasn’t meant to be. The stock climbed to as high as $1080 per share, but abruptly began to go down by mid day. At the end of the trading period AMZN closed down 0.65% to finish at $1046, which makes the net worth of Jeff Bezos $89 billion.
Amazon released its most recent quarterly financial results yesterday after the stock market closed. In the after hours trading AMZN was down 3%, further cementing Jeff Bezos’ position as the second richest man in the world. In terms of its quarterly performance Amazon missed its profits forecast by a mile. The street was anticipating earnings of $1.42 per share, but Amazon only delivered 40 cents. This represents a miss of more than a dollar. However when it comes to this giant online retailer an arguably better indicator of growth may be the revenue side. Michael Yoshikami, founder of Destination Wealth Management said on CNBC’s “Closing Bell,” explains how “everyone knows that Amazon really doesn’t care about the bottom line.” For total sales Amazon delivered $38 billion of revenue, which beat the estimated $37.2 billion by about 2%. The company’s fast growing Amazon Web Services (AWS) saw growth on par with analysts’ expectations. The cloud service made revenue of $4.1 billion vs. $4.08 billion expected, according to FactSet. AWS remains the company’s primary driver of growth. It has grown 42% since this time last year, and generates nearly a billion dollars in operating income.
Amazon may not be a very profitable company yet, compared to other technology giants. But many investors are long Amazon stocks because they like the top-line growth, expanding market share, and innovation. By these standards Amazon has performed very well lately. For example, sales have grown 25% year over year. But instead of prioritizing bottom line growth, the company has decided to spend its capital on developing new areas such as video, fulfillment centers, and international expansion. “Third quarter certainly has a healthy amount of investments and we’ll continue to grow those areas,” Amazon CFO Brian Olsavsky said in a press call on Thursday.
Although he’s a rather private individual, Jeff Bezos have quickly become somewhat of a household name over the last decade or so. In 1994 he quit his Wall St. job to start Amazon.com. Five years later his business was so successful he was named Time magazine’s Person of the year. In 2013 he purchased the Washington Post which was a surprise to many people. In 2015 Amazon seems to have come full circle as it opens a physical bookstore in Seattle, WA. And earlier this year Amazon Studios produced a feature movie called Manchester By the Sea, which won two Oscars including best actor for Casey Affleck. Most recently Amazon bought Whole Foods in an attempt to expand its grocery business.
Over the following weeks or months there is a good chance Jeff Bezos will surpass Bill Gates again to be the world’s richest person. But as a philanthropist, Gates has given $31.1 billion to charitable causes through 2016, according to Forbes.
This author holds 10 shares of AMZN as of writing this post.