Jeff Bezos loses $6 billion
Jeff Bezos loses $6 billion n one day of trading?
According to media reports, the huge $6 Billion loss was caused by an 11 per cent drop in share prices after the company’s quarterly profit fell short of expectations.
Jeff Bezos’ $6 Billion drop in personal finances meant he had been relegated from the fourth to the fifth richest person in the world by Wednesday evening.
According to Forbes, Bezos was worth $49.8 billion at 5pm ET. In the space of 30 minutes he lost $800million, so ended up falling behind Carlos Slim Helu of Mexico, who is now the fourth richest person in the world with a net worth of $49.6 billion.
Investors were preparing for good returns from the online retail giants.
But then Amazon reported a profit of $1.00 per share, while analysts expected an average profit of $1.56
When the results came in, the response was brutal. Stock fell to a low of $545.97 after hours from its closing share price of $635.55 per share. As of 5:00 p.m. ET, Amazon was trading at only $562.80
Even though share prices slumped, sales rose by more than $5billion.
The revenue for the final three months of 2015 was 35.7 billion US dollars, up from just over 29 billion (£20.1bn) in 2014. The three-month time-frame includes the crucial Christmas period, always an important time for the online retailer.
But despite figures for the year that showed a 71 per cent rise in revenue and 186 per cent rise in profit, the results missed the expectations set by analysts and investors, and as a result share prices dropped 12 per cent in after-hours trading.
Bezos remained positive after losing $6 billion following the results.
‘Twenty years ago, I was driving the packages to the post office myself and hoping we might one day afford a forklift. This year, we pass 100 billion dollars in annual sales and serve 300 million customers.
‘And still, measured by the dynamism we see everywhere in the marketplace and by the ever-expanding opportunities we see to invent on behalf of customers, it feels every bit like day one.’
The firm also reported success in other areas – namely its own-brand hardware and Amazon Prime membership plan. Amazon said its Fire TV streaming devices remain the best-selling in the US, while Prime membership – which includes access to the Fire TV streaming service of films and television, as well as a music service and quicker delivery from Amazon Store – rose by 51% globally.
Regarding Jeff Bezos loses $6 billion headlines, technology expert and senior managing editor at CNET, Kent German, said:
‘Despite Amazon reporting its third straight quarter of profits and record sales, the company missed analyst expectations by a wide mark.
‘It continues to expand in new areas like cloud services, streaming entertainment and hardware, but the growing number of Amazon Prime users are presenting the company with a fulfilment problem. It hasn’t been able to recover the shipping costs it’s incurring to meet its promise of free delivery to Prime customers.
‘The challenge over the next year will be to cut shipping costs without prohibitively raising the cost of Prime membership.’
On the first Monday of the year, Bezos lost $3.7 billion – sending his net worth down to a mere $56 billion – after the online retailer slipped 5.8 per cent.
Now it has gone down even further.