Bezos may lose world’s richest tag as Q3 earnings disappoint
LONDON/SEATTLE: Jeff Bezos is at risk of losing the title of world’s richest person to Bill Gates, as Amazon.com Inc. stock slid on Friday.
Shares of the biggest online retailer fell 4% to $1,712 at 9.45 am in New York, a day after reporting its first profit decline in two years. At that price, Bezos has a net worth of $107.1 billion, about $300 million less than Gates, according to the Bloomberg Billionaires Index. Bezos took the top spot from the Microsoft Corp. co-founder in October 2017. The ranking officially updates after the close of each trading day in the US, so any change won’t be official until Friday’s close.
Microsoft, the world’s most valuable company, has surged 38% this year, boosting the value of Gates’s 1% stake and bringing his fortune to $107.4 billion. The rest of his wealth is derived from share sales and investments made over the years by his family office, Cascade. Gates, 63, remains an aggressive stock investor, with more than 60% of his portfolio in equities, he said last month in a Bloomberg Television interview.
Bezos, 55, would have had no trouble retaining the top ranking if he and MacKenzie Bezos hadn’t divorced. The pair split in January, with MacKenzie, 49, receiving a quarter of their Amazon holdings in July. Her net worth would drop to $34.5 billion with
Amazon shares priced at $1,712, and she would remain the world’s fourth-richest woman.
Gates, on the other hand, may have never relinquished the top spot were it not for his philanthropy. He has donated more than $35 billion to the Bill & Melinda Gates Foundation since 1994.
Amazon.com Inc.’s effort to get packages from warehouse to doorstep in a single day helped push the retail giant to its first year-over-year quarterly profit decline since early 2017.
The spending binge isn’t over. Amazon chief financial officer Brian Olsavsky said on Thursday that the costs of the company’s one-day delivery push will total some $1.5 billion during the holiday quarter. Amazon’s projections for operating income and sales in the period fell short of analysts’ estimates, and shares slumped as much as 9.1% in extended trading.
Third-quarter net income narrowed to $2.13 billion, or $4.23 a share, from $2.88 billion, or $5.75, a year earlier, the Seattle-based company said in the statement. It was the first year-over-year decline since the second quarter of 2017. Analysts, on average, estimated $4.59 a share, according to data compiled by Bloomberg.
Amazon projected operating income of $1.2 billion to $2.9 billion in the current quarter compared with analysts’ estimate of $4.31 billion. Sales will be $80 billion to $86.5 billion in the holiday period, the company said, suggesting the difficulty of sparking growth to Amazon’s levels of the past few years. Analysts projected $87.2 billion. Operating expenses during the third quarter climbed 26%, the steepest rise in more than a year, to $66.8 billion.