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You are correct. Much of his personal wealth is equity in his companies, primarily Amazon. That’s tied up in Amazon’s business, not a piggy bank, and leaving th
by SllX 5y ago
You are correct. Much of his personal wealth is equity in his companies, primarily Amazon. That’s tied up in Amazon’s business, not a piggy bank, and leaving that money in Amazon does leave it subject to rises and falls in the market valuation of Amazon. Realizing those gains from his initial investment and any subsequent personal investments in Amazon, or cashing out means selling on the market; and the act of selling on the market has an effect on the selling price on the market, particularly the bigger the sale.
Jeff Bezos has never earned $156B in income in his life, but on paper he could by selling everything he owns. On paper at least.
- edge17 5y agoNot really without moving the price of the stock. You can try it yourself by trading some illiquid securities. It goes with anything you trade - if you trade enough you move the price. It's also not working capital, it's just a personal asset - albeit unrealized gains. Taxing unrealized gains is like you paying taxes for an increase in value in the house you purchased. Until you sell the house, you may not have the money to even pay it.
- SllX 5y agoWe are mostly not disagreeing. On paper does not necessarily reflect what would happen in reality if he tried to sell that much Amazon stock quickly. You did raise a good point on equity vs working capital though, and I’m still inside the edit window so I’m going to adjust that now. Thanks!