Jeff Bezos, CEO of Amazon, the world's largest e-commerce company, is no longer the world’s richest due to an earnings shock in the third quarter of the year,, Forbes reported Thursday.
Amazon released its third quarter results on the day, which suggested a net profit of 2.13 billion U.S. dollars, or 4.23 dollars per share. The number represents a 26 percent plummet from 2.88 billion dollars, or 5.75 dollars per share, in the same period of last year. Amazon's quarterly net profit has thus declined year on year for the first time since the second quarter of 2017.
According to CNBC, Amazon shares plunged 9 percent in after-hours trading on Thursday, as earnings were lower than expected in the third quarter. As a result, Bezos, who owns 57,510,359 Amazon shares, saw the value of his stock holdings plunge by about 7 billion dollars within a single day.
Earlier in July, Bezos divorced Mackenzie Bezos and paid her 4 percent of all Amazon stock, which was worth 38 billion dollars, in divorce settlement. In the wake of the plunge in Amazon stock due to an earnings shock on Thursday, Bezos saw the total value of his assets decline from 160 billion dollars at the time when Forbes ranked him as the world’s richest in March this year to 103.9 billion dollars on the day.
Bezos overtook Bill Gates, the Microsoft founder who had remained the world’s richest for 24 years, last year to become Number 1. He ranked first again this year, but has been overtaken by Gates for the first time in about two years. Forbes said that Gates' assets totaled 105.7 billion dollars as of Thursday.
Amazon said the earnings shock in Q3 were due to excessive investment to build a same-day delivery system. In April this year, Amazon announced that it would make same-day delivery a new standard for its prime members, who pay annual fees, and has been increasing investment in logistics and delivery operations. "We spent about 800 million dollars in the second quarter to this end, which added to some burden," Amazon said. However, Reuters predicted on the day that Amazon's profitability will not improve significantly in the fourth quarter as well if the U.S. retail market suffers a blow in the aftermath of the U.S.-China trade war