Jeff Bezos loses Rs 1.7 lakh crore in a day after Amazon's stock slumped

Jeff Bezos, the founder of Amazon, and the second richest person in the world saw his net worth drop dramatically, losing around $21 billion (Rs 1.7 lakh crore) in just one day, according to a Fortune report. This huge loss happened because Amazon's share price fell sharply, causing a significant decline in Bezos's overall wealth.

Amazon's Share Price Plummets

On Friday, Amazon’s shares dropped by up to 13%. This sudden fall in Amazon's stock price greatly affected Jeff Bezos's net worth, bringing it down to $185.3 billion, according to the Bloomberg Billionaires Index. This decline in Amazon’s share price was a key reason for Bezos’s financial loss. Overall, this drop erased $134 billion (Approx Rs 11 lakh crore) from the combined wealth of the world’s 500 richest people.

Effects on Other Tech Billionaires

The decrease in Amazon’s stock price was part of a larger market selloff. The Nasdaq 100 Index fell by 2.4%, which hurt other tech billionaires too. For instance, Elon Musk saw his net worth drop by $5.2 billion, and Meta CEO Mark Zuckerberg lost $3.3 billion, according to Forbes. This market downturn was worsened by uncertainties about potential Federal Reserve rate cuts and some disappointing earnings reports from major companies.

Bezos's Third-Largest Financial Loss

Credit: BCCL

This recent loss is among the largest single-day drops in Jeff Bezos’s financial history. It ranks third in terms of severity, after two other major declines. The biggest drop occurred on April 4, 2019, when Bezos’s net worth fell by $36 billion due to a divorce settlement. Another significant drop happened on April 29, 2022, when Amazon’s shares fell by 14%.

What is the reason for the loss?

On Thursday, Amazon announced its second-quarter revenue, which was lower than what analysts had predicted. While its cloud computing business performed well, its main e-commerce business was weak. CEO Andy Jassy has been trying to cut costs to invest more in AI, but investors are worried that the company's spending might hurt its profits.

Big tech companies are facing concerns as investors worry that the recent gains driven by AI might be too much or that the market is too focused. Some disappointing earnings reports and uncertainty about possible Federal Reserve rate cuts have caused the Nasdaq 100 Index to fall into correction mode, losing over $2 trillion in value in just a little over three weeks.

Nvidia Corp. and Tesla Inc. have both dropped more than 20% from their recent highs, although they are still up for the year. Overall, technology billionaires have lost $68 billion from their wealth as of 12:33 p.m., according to Bloomberg’s wealth index, reported in Fortune.

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Bezos’s Strategy and Future Plans

Jeff Bezos’s financial setback is also related to his strategy of selling Amazon shares. Earlier this year, he sold stocks worth about $8.5 billion over nine trading days. Additionally, he revealed plans to sell 25 million more shares, worth $5 billion. These sales would bring his total stock sales this year to roughly $13.5 billion. Despite these sales, Bezos will still hold almost 912 million Amazon shares, which is about 8.8% of the company.

Besides his stake in Amazon, Bezos’s wealth also comes from his investments in the space exploration company Blue Origin and The Washington Post.