Jeff Bezos just sold almost $3 billion worth of Amazon shares — here's our best guess at why

  • AmazonCEO Jeff Bezos sold $US1.8 billion worth of the company’s shares at the end of July and an additional $US990 million worth in the beginning of August.
  • It may have been his largest sell-off in Amazon’s history.
  • Neither Bezos nor Amazon provided a reason for the stock sales, but it comes as Amazon and other tech companies are under increased scrutiny about their size and influence.
  • It’s also possible that Bezos might use some of the money toward his space exploration company, Blue Origin, or his charity, the Bezos Day One fund.
  • Visit Business Insider’s homepage for more stories.

Amazon CEO Jeff Bezos went on a selling spree last week that resulted in him offloading roughly $US2.8 billion worth of the company’s stock.

After selling $US1.8 billion worth of the company’s shares in the last three days of July, he sold an additional $US990 million worth of shares in the first two days of August. It may have been his largest stock sale in the internet company’s history.

Bezos cashed in more than 960,000 shares valued at about $US1,900 per share in the last three days of July, as company filings with the Security and Exchange Commission show. That represented 1.6% of Bezos’ total stake in the company, and it could be the largest sale of Amazon stock that Bezos has ever made since he started the company more than 20 years ago, according to Forbes.

Bezos also transferred 19.7 million shares to ex-wife MacKenzie Bezos, making her the company’s second-largest individual shareholder as Bloomberg notes. Her 4% holding in the company is worth $US37 billion.

In the beginning of August, he also sold more than 500,000 additional shares, representing about 1% of his total stake in the company. He also donated 268 shares to a non-profit organisation.

It’s unclear why Bezos decided to sell off his shares at this time. To be sure, the sales were part of a so-called 10b5-1 trading plan, in which shares are automatically sold at pre-determined dates to avoid any perception of trading on insider knowledge. Amazon did not respond to Business Insider’s request for more details about the sale.

Still, an executive cashing out big chunks of stock is often considered a negative sign, since it suggests the person may not be as bullish about the stock’s potential as in the past.

As the owner of several other companies, including a space exploration company and The Washington Post newspaper, Bezos has a lot going on. There are plenty of personal reasons why Bezos might have sold his shares that have nothing to do with Amazon.

Here are our best guesses at where the money from his stock sales might be going, as well as some of the big issues clouding Amazon’s future that coincide with the moves.

The recently announced Department of Justice’s probe into large tech companies wiped billions off the market cap of Amazon, Google, Facebook, and Apple.

The Department of Justice said on July 23 that was launching a broad investigation into market-leading online platforms in search, social media, and e-commerce to determine whether such firms are hampering competition. While it did not specifically name the companies it’s investigating, the DOJ made its announcement after a report from The Wall Street Journal indicated that the DOJ and Federal Trade Commission had split jurisdiction over probing Amazon, Facebook, Google, and Apple.

Shares for Amazon, Apple, Google parent Alphabet, and Facebook were tumbling in after hours trading on July 23, wiping away $US33 billion between the four companies. Amazon was down 1% following the news on July 23, a $US9.8 billion hit to its market capitalisation.

Read more: Amazon reportedly has an ambitious plan to change the way we grocery shop – here’s what we know about it so far

Amazon, along with Google, Facebook, and Apple, have been at the center of the debate about whether tech firms hold too much power and therefore stifle competition.

Amazon; Apple; Facebook; Google; Samantha Lee/Business Insider

Executives from these companies testified before a Congressional antitrust subcommittee in July to answer questions about their business practices and whether they make it more difficult for smaller companies to compete.

Democratic senator and 2020 presidential candidate Elizabeth Warren called for regulation of big tech firms like Amazon earlier this year. Under her plan, large firms with annual global revenue of $US25 billion or more would be classified as “platform utilities,” and certain past acquisitions could even be reversed.

The scrutiny has prompted tech firms to defend their business practices more vocally than ever. In his annual letter to shareholders in April, Bezos didn’t directly address the discussion around tech regulation. But he did stress the success that small and medium sized companies have had on his platform and referred to Amazon as a “small player” in the worldwide retail space.

It’s possible that Bezos could be using some of that money to fund Blue Origin, his private space exploration company.

Axel Springer/Blue Origin/ Business Insider

Bezos liquidates $US1 billion worth of Amazon stock per year to fund Blue Origin, he said when speaking at an event hosted by Business Insider parent company Axel Springer last April.

“The only way I can see to deploy this much financial resource is by converting my Amazon winnings into space travel,” Bezos said at the time. “Blue Origin is expensive enough to be able to use that fortune.”

He also operates a charity called the Bezos Day One Fund.

Bezos may not be as much of a philanthropist as other tech giants like Bill Gates. But he does operate a charity called the Bezos Day One Fund, which funds non-profits that help homeless families and builds preschools in low-income communities. He started the fund with $US2 billion, so it’s possible that he may be putting some of the cash from the sale toward that project.

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