Question

Amazon is one of the most successful on line retailer in the world... What would happen after Bezos leaves? Give reasonable answer

Answer 1

Jeff Bezos is best known as a founder/CEO/President/Chairman of Amazon, and he's still the company's largest shareholder by far, which includes an approximately 16% ownership stake in Amazon’s roughly $811.4 billion market capitalization. He has always been engaged in all aspects of Amazon. However, it was announced of recent that Jeff Bezos and his wife, MacKenzie plan to divorce. This raises a very important question as to how it will affect his control over one of the most successful online retailers in the world. According to the Divorce laws in Washington, where they reside, it is stated that the property acquired during a marriage is generally divided equally between spouses, unless there is a prenuptial agreement. It is known that MacKenzie had been with him since the company's founding and hence, the law would hold and all assets and debts that have accrued during the term of their marriage will be considered to be owned by both. This clouds the prospects of Amazon, both on Wall Street and from a public relations perspective. Due to the Jeff Bezo's major influence on the value of the company, the value of Amazon's shares would fall drastically if he leaves, i.e, by more than 10%. Many of the middle and upper-level employees are incentivized by company stock. An important part of their compensation, more than for most other companies, is based on the stock price continuing to rise. If that stops happening, Amazon employees, who are already very sought after by other companies, will be more susceptible to other offers than ever before. When they start to leave, the stock price stagnation will make it hard for Amazon to replace them leading to another vicious problem. If Jeff decides to sell or transfer half of his shares after his divorce, he won't be able to retain his voting power, and MacKenzie could try to use her stake to push for changes in the company. Tension between the two shareholders could leave Amazon in a bad place, creating a lot of risks for the company. It will not be able to find new sources of revenue growth in other industries, making its expansion slow. It needs to find new sectors to bring online, like it first did with books. It needs new industries, like grocery, health care, banking or automobiles, that have relatively low online penetration and the potential for conversion to online sales to sustain its revenue growth. And because its stock price has been so influenced by revenue growth, it will continue to fall even more. With Jeff leaving, sustaining will be a major problem, leave alone growing.