The world’s richest man, Amazon founder Jeff Bezos, and his wife Mackenzie are going their separate ways after 25 years of marriage.
Wall Street and Amazon shareholders are speculating on what the Bezos divorce settlement will look like and whether Bezos’ US $137 billion fortune will be split down the middle.
Analyst Claude Walker of Simply Wall Street told Your Money Live the split could mean a few things for the market and shareholders.
“The market could lose confidence for various reasons, it could be that the CEO gets distracted. And then there’s the issue of potential change of control of the company.”
But Bezos owns about 15 per cent of the company so there is no issue of who’s in control at Amazon.
Walker predicts Mackenzie will walk away with at least 50 per cent of the shares.
“If you have someone who owns seven per cent of the company who wants to sell, that’s going to be a lot of new shares that are available on the market.”
More supply of available shares could push down the stock price.
But Walker says the worst case scenario is the share price would only go down during the period she is selling or looking to sell. But even that’s not guaranteed.
Most of the time divorces are not something shareholders should worry about, Walker believes.
But he says instability in an executive’s life could impact company performance and is something shareholders should be aware of.
“I’ve personally seen situations where a CEO has gone through a divorce and that impacted a lot of things including the desire to continue with their role.
“In that sort of scenario, the personal impact can really make a difference to shareholders.”
Shares look vulnerable in companies like Tesla where the person in control could be seen to be unraveling.
“I don’t even like it when the CEO talks a lot about the share price.
“Elon Musk coming out and saying he’s going to take over the company at a price of $120 is one of the most hilarious things as a non-shareholder.
“But as a shareholder that wouldn’t give me so much confidence.”
Despite the possibility of a possible shakeup on Wall Street if the divorce does impact Amazon’s share price, Walker says tech stocks are performing well.
His top tech stock pick is Google, crediting its ubiquity in our everyday lives.
“By the standards of Australian tech companies, it’s not overly expensive.
“And we all use it everyday and we can’t stop using it.
“Compare that to Facebook which is arguably a bit cheaper, but you can actually stop using it, as addictive as Instagram and Facebook may be.”
Watch the video for Walker’s full analysis.