As Trump gets angry, Bezos gets richer
President’s wrath hasn’t hurt world’s wealthiest man
Two years into Donald Trump’s presidency, the man who has profited most from the era is his foremost nemesis in the business world, Amazon.com founder Jeff Bezos.
Trump has repeatedly vilified Bezos, threatening his company with tax increases, antitrust prosecution and higher shipping fees, attacking the Bezos-owned Washington Post as a “scam” and even mocking the billionaire for his pending divorce. No figure in corporate America is attacked more often in Trump’s Twitter posts.
Yet no one has made more money than Bezos since Trump’s election. The President’s social-media huffing and puffing hasn’t hurt a solidly constructed business riding the rise of electronic commerce, web advertising and cloud computing.
Since the election, Bezos has become the world’s richest person, his net worth swelling by US$66.2 billion ($96b) as of last Friday, surpassing the gains of the world’s second-fastest riser during that period, French luxury-goods tycoon Bernard Arnault, by 50 per cent. Bezos’ wealth was valued at US$134.8b, making his fortune a third bigger than Bill Gates’, according to the Bloomberg Billionaires Index.
Within the US, the closest anyone has come to the Amazon chief’s Trump era gains is investor Warren Buffett — who added US$19.5b over the same period. Bezos’ and Amazon’s success has made the tycoon and his company a fixture of American society. During Sunday’s Super Bowl, Bezos sat with NFL Commissioner Roger Goodell while Amazon aired ads for its Alexa service starring Harrison Ford. A Washington Post ad narrated by Tom Hanks celebrated American journalism with the pointed line, “Knowing keeps us free”.
The President’s son, Donald Trump Jr, mocked the Post ad on Twitter.
Bezos’ wealth has surged since the President took office, with his net worth growing US$63.9b since Trump’s inauguration. For context, just five other men in the world — Gates, Buffett, Arnault, Facebook’s Mark Zuckerberg and Spanish clothing retailer Amancio Ortega — are worth more than US$63b.
The enormous gains have been driven almost exclusively by Bezos’ holdings in Amazon. Even with the company’s stock dropping after lower-than-expected growth guidance, shares in Amazon rose 107 per cent since Election Day as of the close of markets last Friday.
Even as Amazon’s low-margin electronic commerce business has matured, the company added fast growing lines that are more profitable. The company dominates cloud computing, benefiting from a rapid transition among businesses towards renting computing power and data storage space rather than maintaining their own facilities. Digital advertising recently emerged as a new profit centre as the tech giant takes advantage of its deep data on consumer purchase behaviour and position as the web’s most prominent marketplace.
Trump’s threats have so far been idle. The federal government hasn’t launched any antitrust prosecution against Amazon.
The President’s agitation for the US Postal Service to charge more for package delivery — based on his belief Amazon has a sweetheart deal costing the government money — led only to a Treasury Department report proposing the post office increase rates. The report didn’t provide explicit instructions on how much more the Postal Service should charge. The service maintains that it doesn’t lose money on Amazon deliveries.
In the meantime, Amazon is expanding its own delivery infrastructure, reducing its reliance on any provider.
If anything, Amazon may be benefiting from Trump’s Administration. The company is pitching its facial recognition software as a tool for the Immigration and Customs Enforcement agency, positioning itself to reap profits from the President’s crackdown on illegal immigration.
The Trump Department of Defence’s decision to give a US$10b cloud computing to a single contractor is widely believed to advantage Amazon Web Services when the award is made later this year.
The Washington Post’s investigations of Trump and his administration have captured wide attention for Bezos’ newspaper. Though the closely held company doesn’t disclose financial results, publisher Fred Ryan said early last year that the paper had turned a profit for a second straight year.
In recent weeks, Trump has seized on more personal criticism of the Amazon founder. During the government shutdown early last month, Trump seemed to revel in news that Bezos was divorcing his wife, MacKenzie, after 25 years of marriage.
“It’s going to be a beauty”, Trump — who is himself familiar with messy divorce settlements — said of the news.
One consolation for Bezos: even if his wife is awarded half of their assets — a possibility under Washington state law, which provides for property acquired during marriage to be equally divided in a divorce — the Amazon chief will still be almost as rich as he was the day Trump was elected.