What made Jeff Bezos trump Bill Gates as world’s richest person

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Updated: July 28, 2017 12:01:33 PM

Jeff Bezos' wealth has multiplied recently, while Amazon’s share price has surged as much as about 40% so far this year as the world’s largest e-marketplace continues to grow its topline by leaps and bounds.

While Jeff Bezos’ fortunes are largely tied to the Amazon stock, Bill Gates wealth is fairly diversified across various investments. (Image: Reuters)

The world order changed last night, and then it changed back. Jeff Bezos, the founder and Chief Executive Officer of Amazon, briefly became the world’s richest person, toppling Microsoft boss Bill Gates from the numero uno position, before his wealth came crashing down again in a few hours with the slump in the share price of his e-marketplace company Amazon.

Amazon shares rose 2.9% last evening when trading opened in the US, taking the value of Jeff Bezos’ total holding to $92.3 billion, as the investors anxiously waited for the company’s quarterly results. But soon after, the shares slumped just ahead of Amazon’s financial results showed that the company’s second quarter earnings per share of 40 cents missed the lowest analyst estimate, while falling way short of median estimate as per a Bloomberg poll of analysts.

Bill lets his money out of the Gates

During this time, the value of Jeff Bezos’ 17% equity holding in Amazon swung as much as $3 billion between $92.3 billion and $89.3 billion. Meanwhile, Bill Gates’ wealth was measured at $90.8 billion at the end of the day, through his shareholding in Microsoft. All figures are taken from various Bloomberg news reports.

Notably, while Jeff Bezos’ fortunes are largely tied to the Amazon stock, Bill Gates wealth is fairly diversified across various investments, with Microsoft shares making up for about $14 billion of his total net worth and the remaining coming in from his various other investments, according to Forbes magazine. Further, most billionaire list compilations, including those of Forbes and Bloomberg, do not count in Bill Gates’ wealth his over $30 billion contributions towards charity, shaving that much away from his worth.

Amazing rise of Amazon

On the other hand, Amazon’s share price has surged as much as about 40% so far this year as the world’s largest e-marketplace continues to grow its topline by leaps and bounds. Earlier this week, CNBC reported citing an equity analyst that Amazon could soon become a trillion-dollar company with its stock price doubling to $2,000, specially if its proposed $14 billion acquisition of the grocery store chain Whole Foods goes through. “Honestly, this could be the first trillion-dollar company… If they (regulators) do rubber-stamp it as a ‘yes’, I think there’s very little to stop this from becoming a $2,000 stock,” equity analyst James Cakmak said on CNBC’s Squawk Box.

Jeff Bezos’ journey to fame and big moneys could be traced to as far back as in 1997, when his online book selling venture Amazon.com’s IPO valued the company at $400 million. Amazon soon expanded its footprint, moving into selling CDs and DVDs, and then toys and electronics. Amazon’s valuation, and accordingly, Jeff Bezos’ wealth has seen a series of spurts in the last five years. Jeff Bezos has added $40 billion to his wealth in the last one-and-a-half-years alone.

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