MSG Team's other articles

10823 Pros and Cons of Technology in Pension Funds

In the previous article, we have already seen how fintech is changing almost every aspect of pension fund management. The fact that technology is in the process of revolutionizing the pension fund industry is no longer a secret. Pension funds do not have any option other than adapting to technology. This adaptation is revolutionary given […]

12000 Why must corporations be taxed?

We live in a capitalist world today. This is the era of multinational corporations. Today, there are many companies that are more powerful as compared to entire nations. This is the reason that they sometimes lobby hard to avoid taxes. Many times, when these companies are in a dominant position, they even threaten governments that […]

10981 Retail Inventory Method (RIM)

Inventory is a very important part of the retail business. This is because the stock which retail stores hold on their books is their most important asset. The quality of this asset allows them to generate higher profits as compared to their peers. Hence, the valuation of inventory which is held by the retailer is […]

11811 What are Capitalization Tables?

The capitalization table is a very important record for any startup company. These tables provide a clear and unambiguous report of who owns and controls what percentage of the startup’s shares. It is considered to be the final and irrefutable record that provides details about the ownership of the company. Since decisions involving financing, sale, […]

11602 Understanding the Trading Cycles in Forex Market

Trend Is Your Friend Forex trading systems are what we often call “reactive systems”. There are many factors at work, and they cannot be quantified and measured to enable decision making. Forex traders, therefore, trade the trend. In other words, they try to time the market. Most successful Forex traders believe that the markets have […]

Search with tags

  • No tags available.

In April 2019, the stock price of Amazon had taken a beating because of the news of the divorce of its billionaire founder. Jeff Bezos, the charismatic billionaire founder of the company, was reportedly involved in an illicit romantic relationship with an acquaintance. When the news of this relationship reached Jeff’s wife Mackenzie Bezos, she filed for divorce. As soon as this news became public, the future of Amazon as a company immediately came into question.

The Bezos shares in Amazon were valued at $143 billion. Jeff and Mackenzie had a combined stake in this company. If this divorce turned out to be an ugly legal battle, then the future of one of the most iconic American companies could be jeopardized. The future of the company, as well as thousands of shareholders, lay in the hands of this power couple.

The Deal

Jeff and Mackenzie have shown remarkable maturity while coming up with the terms of this divorce deal. Unlike many other celebrity divorces, this divorce did not turn out to be an ugly legal battle which would make it fodder for the tabloid gossip.

Both Jeff and Mackenzie have been able to work out their settlement amicably behind closed doors. The final details of the settlement were announced on Twitter by both Jeff and Mackenzie who claimed to be grateful for their 26-year-old marriage and looking forward to the future.

This deal was well received by Wall Street as investors cheered the responsible decisions made by the power couple.

Jeff Bezos Retains Control

The headline of this divorce settlement is that Jeff Bezos still retains control of the Amazon stock. Despite this fact, Mackenzie does not seem to have been slighted. She will receive $36 billion in the divorce settlement which will make her the 3rd wealthiest woman in the world. By any measures conceivable, this is still the largest divorce deal in world history. However, it has not been as dramatic as the analysts and paparazzi had predicted.

The biggest news here is that Mackenzie did not try to hold Jeff at ransom as predicted by some analysts. Jeff’s post-divorce net worth will still be over $100 billion, and he will continue to be the richest man in the world according to Forbes.

Voting Rights

Most of the money received by Mackenzie Bezos will be denominated in Amazon stock. She will retain approximately 4% of the company’s stock which is currently valued at $36 billion. However, Mackenzie has given up on the voting rights of the company.

Mackenzie is free to sell her shares whenever she wants to. However, these shares will not have any voting rights. If the buyer of these shares wants to obtain voting rights, they will have to enter into an agreement with Jeff Bezos to obtain the same.

As soon as Amazon claimed in an SEC filing that Jeff Bezos will retain control over the company, the anxious Amazon investors were overjoyed.

Why Are Voting Rights Important?

Ever since the question of the Bezos divorce was raised, voting rights were always the main topic of deliberation. This is because Amazon is a company with a large free float. About 67% of the company’s shares are publicly traded. This meant that if Jeff Bezos lost more shares to a predatory third party under the pretext of a divorce, there was a slight chance that he could be ousted from the company’s board and Amazon could become a target for a hostile takeover.

The shareholders of Amazon have always held Jeff Bezos in high regard. According to them, Bezos is a maverick who has morphed this small online book store into the retail giant that it is today. Any change in the leadership of Amazon was likely to be negatively viewed by the shareholders. This is the reason why Jeff’s continued control over Amazon is vital to the shareholders.

No Boardroom Battles

A lot of analysts were bearish on Amazon because they thought that the company would be drawn into long protracted board room battles.

Since the company operates in a hyper-competitive environment, it needs to be extremely focused on growth. If it fails to do so, it may lose its edge. Analysts had expected Jeff Bezos to be distracted by long drawn legal battles focused on protecting his wealth. Instead, the maverick founder has reached an amicable deal meaning that his personal focus, as well as the focus of his company, are no longer in jeopardy.

The bottom line is that the Amazon divorce battle has turned out to be very different from what analysts and commentators had predicted. In fact, it has not been a battle at all.

The biggest divorce settlement in the history of the world has also been one of the most amicable ones. Both Jeff and Mackenzie now plan to focus on their future endeavours. The shareholders of Amazon are overjoyed with the fact that the company that they help built will not be destroyed because of a personal battle.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

What is Cost of Equity? – Meaning, Concept and Formula

MSG Team

Cross Border Credit Reporting

MSG Team

What is Corporate Finance? – Meaning and Important Concepts

MSG Team