After running Amazon for over 26 years, Jeff Bezos announced this morning that he had officially resigned from his position as Chief Executive Officer. Although the departure wasn’t a surprise to anyone, it signifies a major change in how the online retailer plans to operate in the future. Additionally, it says a lot about how how most billionaires are moving away from traditional sectors to more high-growth, speculative ones.
In his place, Bezos will be replaced by Andy Jassy, the top executive behind Amazon Web Services since the business was created back in the early 2000s. Jassy has been acting as Bezos’ right-hand man. Emails were always copied between the two of them, and most within the company had an idea that Jassy would end up replacing Bezos if something happened to the latter. At the moment of writing, Bezos’ current net worth is sitting at $211 billion, making him the world’s wealthiest man by far.
Besides philanthropic efforts, Bezos has said he plans to focus more on his Blue Origins project full-time. The private space company is planning a commercial flight on July 20th. Another space project funded by another billionaire, Richard Branson’s Virgin Galactic, is expected to launch its own commercial flight this Sunday. Although investing in Blue Origins remains firmly out of reach for most people (Bleu Origins is a private company), other space-related stocks have seen their market caps explode in recent months.
Amazon also shot up this morning after the Pentagon announced it was canceling a $10 billion cloud-computing contract with Microsoft. The contract, known as JEDI and previously approved under former President Donald Trump, was aimed at ramping up the technological infrastructure of the Pentagon, primarily from a logistics and administrative standpoint.
Trump was far from a fan of Bezos in the past, but under the Biden administration, the contract is expected to be awarded to Amazon, which already has become a major leader in the cloud computing sector.
“We understand and agree with the DoD’s decision. Unfortunately, the contract award was not based on the merits of the proposals and instead was the result of outside influence that has no place in government procurement,” said an Amazon Web Services spokesperson in a statement, criticizing what was likely Trump’s influence on the initial decision.
Following the news from the Department of Defense, shares of Amazon surged around 4.7%, a pretty large margin for a company with close to a $2 trillion market cap. The stock is up 15.4% since the start of 2021, which is close to what the Nasdaq has performed as well during the same timeframe.
Amazon Company Profile
Amazon is a leading online retailer and one of the highest-grossing e-commerce aggregators, with $386 billion in net sales and approximately $482 billion in estimated physical/digital online gross merchandise volume, or GMV, in 2020. Retail related revenue represented approximately 83% of total, followed by Amazon Web Services’ cloud computing, storage, database, and other offerings (12%), and advertising services and cobranded credit cards (6%). International segments constituted 27% of Amazon’s non-AWS sales in 2020, led by Germany, the United Kingdom, and Japan. – Warrior Trading News