Business

Jeff Bezos Momentarily Enjoys Position Of The World’s Richest Man

The owner of The Washington Post and the founder of Amazon.com, Jeffrey P. Bezos aka Jeff Bezos became the richest man in the world when he surpassed the founder of Microsoft, Bill Gates yesterday. However, this victory was short lived.

With the rise of Jeff Bezos position to No.1, a sudden increase in Amazon’s shares was recorded as they increased from $1000 to $1082 one day ahead of the company’s online earnings reports. This surge in shares increased Bezos worth to $90.6 billion while Bill Gates stood at $90.1 billion. However, the same day, Amazon couldn’t hold its shares to the same level and once again; Bill Gates secured the position of the richest man in the world.

Also Read: This is how Amazon, Facebook, Google and Microsoft make money

Second quarter shares

The shares of the company in the second quarter of the year went 3% down on Thursday and hence, fell short of expectations. Profit of $197 million was reported by the company which amounts to 40 cents per share. However, the profit recorded in the previous year amounted to $1.78 per share. A difference of $857 million was recorded between shares of the previous and the current year.

Consumer equity strategist at Morningstar R.J. Hottovy, said:

“We can chalk the miss up to more fulfillment center and technology spending. The technology is where a lot of spending is going, such as Amazon Web Services and Echo and other new products”

$500-billion-plus-club

Amazon also broke the $500 billion market cap mark recently and gained a position in the $500-billion-plus-club with companies such as Alphabet, Microsoft, and Apple.  A hefty portion of Amazon’s profits is due to its web Services, large government contracts and cloud-computing units.

Quick Read: Amazon CEO becomes the third richest person in the world

Prime Membership

Another factor that has led Amazon to its success is its Prime Membership program with subscribers paying $99 per year for unlimited two day shipping. The number of prime subscribers Amazon currently has is still not known as the company hasn’t disclosed any information about it. However, according to a statement by Jeff Bezos in February, “tens of millions of new paid members” had joined Prime in the past year.

Merger with whole foods

Recently, Amazon announced that it has decided to buy out Whole Foods for $13.7 billion, which is one of the largest organics and healthy foods dealer. This news has already shaken the grocery market as retailers have started to cut down their prices.

However, this move by Amazon has raised antitrust issues. As a result, the United Food and Commercial Workers International Union has decided to register a complaint with the Federal Trade Commission as they believe this move will result in the loss of jobs and the entire white wash of competition in the industry.

Specialist in antitrust, Law School professor, Michael A. Carrier said Amazon “should be between worried and complacent” when it comes to antitrust action. He said:

“Typically, the antitrust authorities do not worry about mergers when the companies are not direct competitors”

He further added:

“The complicating factor, however, is that Amazon is a large company that has increasing tentacles into many markets. There’s a sense that they are having more and more control over our lives. The reason their level of concern should be above complacency is that Washington has noticed that Amazon is getting big. Politicians from the president on down have observed Amazon is large and maybe this merger deserves a closer look”

Read More: After a flopped smartphone ‘fire’, Amazon is now launching an ice phone

On the other hand, Hottovy said that the thing that worries him more is that the company might face a big amount of tax to be paid after the merger. As the company relies mostly on the Postal Services of the U.S. he said:

“My biggest worry is more stringent taxes”

Referring to Jeff Bezos current position in the race of the world’s richest, Michael Farr said:

“Too much of a good thing can be wonderful. We presume Mr. Bezos agrees. The power and value of technology can’t be overestimated. We believe Mr. Bezos will continue to set records.”

Source: NDTV

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