Amazon founder and chairman Jeff Bezos has seen its net worth of approximately $ 20 billion as the company’s stock moves to its worst day in eight years.
Shares of Amazon fell 12.6 percent at noon on Friday to $ 2,527.64 after the company announced its first quarterly loss since 2015 and slowed sales growth for the first time in 21 years.
Bezos has an 11.1% stake in the company, and most of his wealth consists of shares in Amazon, which means that the billionaire suffered huge losses on paper while the shares fell.
At the close of markets on Thursday, Bezos cost about $ 169 billion, according to the Bloomberg Billion Index, and its destruction of $ 20 billion on Friday represents about a 12% drop in its condition.
Amazon founder and chairman Jeff Bezos has seen its net worth wiped out by about $ 20 billion as the company’s stock heads to its worst day in eight years.
Shares of Amazon fell 12.59% at noon on Friday to $ 2527.64 after the company announced its first quarterly loss since 2015.
Including Friday’s losses, Bezos has lost about $ 40 billion in net worth since the beginning of the year – but he remains the second richest man in the world, after Elon Musk.
The losses suffered by Bezos are only on paper, which means that they can be reversed if the price of Amazon’s shares rises again before it sells its shares.
The fall in Amazon’s share price pushed the Nasdaq into a sharp monthly decline on Friday, and US markets appear to end March with its worst monthly performance since the start of the COVID-19 pandemic.
Amazon stunned Wall Street on Thursday, reporting a loss of $ 3.84 billion, or $ 7.56 per share, for the first three months of the year. A year ago, it reported earnings of $ 8.1 billion, or $ 15.79 per share, in the first quarter.
The ocean of red ink in Amazon’s report comes mostly from the company’s report of a loss of $ 7.6 billion in the value of its investment in shares in Rivian Automotive.
However, Amazon’s e-commerce business also reported an operating loss of $ 1.57 billion in North America and $ 1.28 billion internationally.
Amazon has spent billions on new warehouses to meet growing demand, but some analysts warn it may have expanded too much, too soon
Government figures show that online retail spending fell in February and March, and Amazon is now struggling to cut spending after an explosive period of growth during the pandemic.
Amazon has had to raise wages to attract workers, almost doubling its workforce by 2020, and is currently battling unionization efforts in New York that could lead to even higher labor costs.
The company has also spent billions on new warehouses to meet growing demand, but some analysts warn it may have expanded too much, too soon.
In addition, higher fuel prices are eating away at consumers’ disposable income, while making delivery more expensive for Amazon.
Like many others, Amazon is coping with inflationary pressures and supply chain problems.
Inflation-related costs added about $ 2 billion in additional costs compared to last year, Amazon chief financial officer Brian Olsawski said, adding that the company also incurred another $ 4 billion in costs related to lost productivity and other inefficiencies.
Amazon is battling a union attempt at its Staten Island warehouse, where organizers are seen demonstrating Monday above
“The pandemic and the ensuing war in Ukraine have brought extraordinary growth and challenges,” Amazon CEO Andy Jesse said in a statement.
“Our teams are fully focused on improving productivity and cost efficiency throughout our implementation network. We know how to do this and we have done it before.
To offset rising fuel costs and inflation, the retail giant added a 5% mark-up to the fees it charges third-party vendors who use its services to perform.
In the last quarter, Amazon also increased its annual Prime membership fee by $ 20 to $ 139 per year, its first interest rate increase since 2018.
Despite the fee increase, Olsawski said millions of new Prime members signed up during the quarter.
“Given the pace at which business has grown over the past few years, this change is hardly surprising,” Neil Saunders, managing director of GlobalData Retail, told Reuters.
“This is a reset after a pandemic rather than a catastrophic failure. However, the delay raises important questions about how Amazon can regain momentum and regain its leadership position as one of the main drivers of online growth.
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