Results 1 to 16 of 16

Thread: Amazon Stocks...

  1. #1
    Join Date
    May 2010
    Posts
    1,263

    Amazon Stocks...

    Hiya..

    I heard Jeff Bezos saying that he liquidises one billion pounds worth of stock per year..

    But what does that mean, how does he get his money ?

    I mean, its okay selling his stock to get money but what if no one wants to buy the stock, then what ?

    Also, if he liquidises his stock does that mean he still has the same amount of stock after ?

    Even though he has lots of stock at a high value, how does he get one billion a year from it, where does the money come from.. ?

    Thanks.. !
    Far away is close at hand in images of elsewhere...

  2. #2
    Join Date
    May 2018
    Posts
    16
    Quote Originally Posted by kevin1981 View Post
    Hiya..

    I heard Jeff Bezos saying that he liquidises one billion pounds worth of stock per year..
    Probably he "liquidates" his stock. Either he needs a little bit of pocket money, or (more likely), he wants to be more diversified, so that if Amazon stock were to lose value, he wouldn't be affected as much.

    Quote Originally Posted by kevin1981 View Post
    But what does that mean, how does he get his money ?
    He sells some of his shares of Amazon stock to other people who want to buy it.

    Quote Originally Posted by kevin1981 View Post
    I mean, its okay selling his stock to get money but what if no one wants to buy the stock, then what ?
    If no one wants to buy it, then he can't sell it. He could try offering it a lower price, to see if anyone wants to buy it then. This is essentially what happens in financial markets, constantly - if there is an order imbalance, then the price goes down (to cause more people to want to buy the asset and fewer people to want to sell it) or up (to cause more people to want to sell the asset, and fewer people to want to buy it), depending on the direction of the imbalance.

    Quote Originally Posted by kevin1981 View Post
    Also, if he liquidises his stock does that mean he still has the same amount of stock after ?
    No, he has the amount he had before, minus the amount that he sells. If he sells enough of it, his control of the firm could be threatened, since shares have voting rights. The people who buy the shares have the right to vote against him when choosing the firm management, if they don't think he is doing a good job.

    Quote Originally Posted by kevin1981 View Post
    Even though he has lots of stock at a high value, how does he get one billion a year from it, where does the money come from.. ?
    It comes from the people who want to buy the shares. If they don't think Amazon is worth enough, then he won't be able to raise the one billion pounds he wants each year by selling shares. So far, it doesn't seem to have been a problem.

    Thanks.. ![/QUOTE]

  3. #3
    Join Date
    Feb 2003
    Location
    Depew, NY
    Posts
    11,266
    Bezos has a lot of Amazon stock, so he sells a billion dollars worth of it every year. He has about 80 millions shares right now. He simply has that much stock to work from. The dollars he receives from that sale comes from people who happen to be purchasing Amazon stock at that moment.

    There is a goodly amount of approximation in these figures. The transaction is timed to the market so that he receives the best amount of money for the amount of stock he is willing to sell. But he doesn't know when that will be or exactly how much money that could be. He as a good idea, but it is never exact.

    If literally no one wanted the stock, he wouldn't be able to sell it. It is unwanted. What is more likely is that fewer than average people desire it, so the price drops per stock. That means if Bezos wants a billion dollars (or close to it) he needs to increase the quantity of stock he sells. If there ever comes a day where Amazon stock is tanking, that is "bad day" for everyone to sell that stock. On the other hand, if Amazon stock tanks, that is an excellent day for Bezos to sell stock because it means it's time to walk away from Amazon completely. This second concept only works for Jeff Bezos because it would be about the same as quitting a bad job for you or me. Once he is out of stock, he likely won't be at the helm any more and will not want that position anyway.
    Solfe

  4. #4
    Join Date
    May 2010
    Posts
    1,263
    Thanks guys, really helpful posts..

    Quote Originally Posted by fullstop View Post
    Probably he "liquidates" his stock. Either he needs a little bit of pocket money, or (more likely), he wants to be more diversified, so that if Amazon stock were to lose value, he wouldn't be affected as much.
    He says he is investing large amounts of money into his space programme, blue origin..

    I thought net worth was what a person has in the bank, i thought Bezos had 100 billion, literally in cash !

    But i see that is not the case. So saying he is the richest man in the world may not strictly be true as he may only have say 3 billion in cash in a bank while someone else with fewer stocks may have
    more cash in the bank than Bezos, say 5 billon.. So the latter person has more, direct, easy to access cash than Bezos..

    Also how do people make money in buying and selling shares..

    Say Bezos is selling a load of stock, i'm guessing someone with money to invest would calculate that over the next few years the shares will rise so they take a
    calculated gamble. They wait five years and then decide to sell and gain a profit if the shares have risen. But what happens if the shares stagnate, i mean, they will have to
    plateau at some point.

    Are people trading large amount of stocks and shares all the time ?

    I guess the more you invest the more your return could be.. Do people study businesses and buy and sell shares and stocks regularly ? It sounds like a dangerous game to be in..
    Far away is close at hand in images of elsewhere...

  5. #5
    Join Date
    Aug 2005
    Location
    NEOTP Atlanta, GA
    Posts
    2,288
    Total assets - total debts and obligations = Net worth.

    So assets can include stocks, cash, real estate, cars, furniture, artwork, etc. So “what’s in the bank” is just a partial picture of net worth.


    Sent from my iPhone using Tapatalk Pro

  6. #6
    Join Date
    Sep 2003
    Location
    The beautiful north coast (Ohio)
    Posts
    47,538
    I'm not sure why this is Science or Technology. Moved from S&T to OTB.
    At night the stars put on a show for free (Carole King)

    All moderation in purple - The rules

  7. #7
    Join Date
    Jul 2006
    Posts
    12,160
    Quote Originally Posted by Swift View Post
    I'm not sure why this is Science or Technology. Moved from S&T to OTB.
    So, you are then siding with the assessment that Economics is not a science?

    Just asking for a clarification.
    Time wasted having fun is not time wasted - Lennon
    (John, not the other one.)

  8. #8
    Join Date
    May 2010
    Posts
    1,263
    Quote Originally Posted by Swift View Post
    I'm not sure why this is Science or Technology. Moved from S&T to OTB.

    Sorry about that, i did wonder where to put it and then i thought it could come under technology.. But i guess it is pretty borderline !
    Far away is close at hand in images of elsewhere...

  9. #9
    Join Date
    Jul 2006
    Posts
    12,160
    Quote Originally Posted by BigDon View Post
    So, you are then siding with the assessment that Economics is not a science?

    Just asking for a clarification.
    I know way too many people who lurk here, that have my text number.

    Okay, okay, I'm only asking to be an intentional pain in the butt.

    (There, you happy now?)
    Time wasted having fun is not time wasted - Lennon
    (John, not the other one.)

  10. #10
    Join Date
    Sep 2003
    Location
    The beautiful north coast (Ohio)
    Posts
    47,538
    Quote Originally Posted by BigDon View Post
    So, you are then siding with the assessment that Economics is not a science?

    Just asking for a clarification.
    Actually, I do think economics, particularly macro-economics, is a science, even if a soft-science. I wasn't thinking economics when I saw the OP; I didn't think of how stock trading works as economics. Maybe that's my stupidity.
    At night the stars put on a show for free (Carole King)

    All moderation in purple - The rules

  11. #11
    Join Date
    May 2018
    Posts
    16
    Quote Originally Posted by kevin1981 View Post
    I thought net worth was what a person has in the bank,
    That is not the typical definition, it normally includes all assets that a person owns - shares of stock, properties, fine art, whatever.

    Quote Originally Posted by kevin1981 View Post
    i thought Bezos had 100 billion, literally in cash !
    I don't pay particular attention to Bezos's finances, but I would guess that nearly all that 100 billion is in the form of Amazon shares.

    Quote Originally Posted by kevin1981 View Post
    But i see that is not the case. So saying he is the richest man in the world may not strictly be true as he may only have say 3 billion in cash in a bank while someone else with fewer stocks may have
    more cash in the bank than Bezos, say 5 billon.. So the latter person has more, direct, easy to access cash than Bezos..
    I would be surprised if he has even that much in cash. But, from a little quick Google work, it looks like roughly $8.5 billion worth of Amazon shares trade hands each day. So if Bezos needed a few billion to buy an aircraft carrier or something like that, he could raise it (by selling shares) relatively quickly.

    Quote Originally Posted by kevin1981 View Post
    Also how do people make money in buying and selling shares..
    A "share" is a share of ownership in the corporation. There are essentially two ways to make money with shares. The shares may periodically pay dividends, which come from the firms operations. Or, you can buy the shares at a low price, and sell them at some other time at a high price. (The latter includes the practice of "short selling", in which the sale comes first, and the purchase later.)

    Quote Originally Posted by kevin1981 View Post
    Say Bezos is selling a load of stock, i'm guessing someone with money to invest would calculate that over the next few years the shares will rise so they take a
    calculated gamble. They wait five years and then decide to sell and gain a profit if the shares have risen.
    It doesn't have to be five years, but yes, essentially that is correct.

    Quote Originally Posted by kevin1981 View Post
    But what happens if the shares stagnate, i mean, they will have to
    plateau at some point.
    There's no fundamental principle of economics that requires that they plateau. The prices of the shares are set in the marketplace by people buying and selling the shares. Even if a firm has declining profits, its shares do not have to plateau, if the declining profits were anticipated by investors. However, if a firm starts to decline and the decline was not anticipated, then the price of the shares could stagnate or decline.

    Quote Originally Posted by kevin1981 View Post
    Are people trading large amount of stocks and shares all the time ?
    Yes, every day.

    Quote Originally Posted by kevin1981 View Post
    I guess the more you invest the more your return could be..
    The more you invest, the more your profits could be. But then again, your losses could also be larger.

    Quote Originally Posted by kevin1981 View Post
    Do people study businesses and buy and sell shares and stocks regularly ?
    Yes, constantly.

    Quote Originally Posted by kevin1981 View Post
    It sounds like a dangerous game to be in..
    It is risky - prices of shares can decline. One way to mitigate that risk is to diversify. Diversification is based on the principles that the expected return of a portfolio is the average expected return of the assets in the portfolio. However, the risk (and there are different ways to measure risk, but let's not worry about that for the moment) of the portfolio is less than the average risk of the individual assets.

  12. #12
    Join Date
    May 2018
    Posts
    16
    Quote Originally Posted by BigDon View Post
    So, you are then siding with the assessment that Economics is not a science?

    Just asking for a clarification.
    The questions that kevin1981 is asking mostly have specific, well-defined answers.

    I get the impression that quite a number of the board members don't think physics is a science.

  13. #13
    Join Date
    Jul 2006
    Posts
    12,160
    Quote Originally Posted by fullstop View Post
    The questions that kevin1981 is asking mostly have specific, well-defined answers.

    I get the impression that quite a number of the board members don't think physics is a science.
    Isn't required, to be a member of this forum. Just the ability to follow the rules and be polite.

    And if nobody has said so yet, welcome to the boards.
    Time wasted having fun is not time wasted - Lennon
    (John, not the other one.)

  14. #14
    Join Date
    May 2018
    Posts
    16
    Quote Originally Posted by BigDon View Post
    And if nobody has said so yet, welcome to the boards.
    I don't believe anyone has, so I thank you for being the first, BigDon!

    My very first attempt at posting was in some thread where new members are to introduce themselves, but for some reason, it was locked. My post there seems to have gone off into hyperspace, because I have a "post count" of five, but only four of them show up in a search.
    Last edited by fullstop; 2018-Jun-08 at 08:43 AM.

  15. #15
    Join Date
    Aug 2017
    Posts
    3
    I'm glad someone benefits from my weekly spending.

    Sent from my SM-G930V using Tapatalk

  16. #16
    Join Date
    Jul 2006
    Posts
    12,160
    Same thing happened to me way back when.

    Just thing of it as Jedi forum poo-doo and move on. You'll be happier that way.
    Time wasted having fun is not time wasted - Lennon
    (John, not the other one.)

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •