Bezos' Skillful Stock Sale Avoids Sharp Market Drop

[Image source=AP Yonhap News]

[Asia Economy New York=Correspondent Baek Jong-min] Jeff Bezos, CEO of Amazon, reportedly sold his shares just before the stock price plummeted due to the COVID-19 pandemic. Considering the subsequent stock price drop, he avoided a loss of approximately 392.5 billion KRW.

According to the Wall Street Journal (WSJ) on the 24th (local time), Bezos sold $3.4 billion worth of Amazon shares in early last month. The sale accounted for about 3% of the Amazon shares he held.

WSJ focused on the timing of Bezos's sale. It was before the U.S. stock market was fully impacted by COVID-19. At the time of the sale, Amazon's stock price was around $2,000, but after the recent crash, it fell to $1,600. WSJ analyzed that if Bezos had held onto the shares until the 20th, he would have incurred a loss of $317 million (392.5 billion KRW).

Bezos is not the only one who sold shares before the stock price plunge. Larry Fink, CEO of BlackRock, the world's largest asset management firm, sold $25 million worth of shares around the same time, avoiding a loss of $9.3 million. Lance Uggla, CEO of market research firm IHS Markit, also sold $47 million worth of shares. The value of Uggla's shares as of the 20th was only $19.2 million, less than half the sale price. James Murren, CEO of casino operator MGM Resorts, which was severely hit by COVID-19, sold $22.2 million worth of shares; the company's stock price dropped 73% from its February peak.

The CEOs' timing of sales has led to speculation that they may have used insider information. In particular, some U.S. Congress members have recently been criticized for selling shares after receiving undisclosed briefings on the COVID-19 situation.

WSJ stated that it is unknown whether CEO Bezos used insider information to sell shares. Since the stock price was at an all-time high and the market capitalization had returned to $1 trillion, it could have been an opportunity to liquidate assets. It was also reported that major U.S. company shareholders and executives tend to sell some shares early in the year through prior notification.

However, corporate governance expert Adam Epstein told WSJ, "I advise CEOs not to sell their shares during periods when stock prices are plummeting."

This content was produced with the assistance of AI translation services.