At $2,129, Amazon stock is down 37 per cent year to date.
Founder Jeff Bezos – who now owns 10 per cent of the company after he and wife MacKenzie divorced in 2019 after 25 years of marriage and he transferred a quarter of his then-16 per cent Amazon stake to her – has slipped $45 billion in personal wealth from his peak in 2021.
Perfect time for a fighter to remind the baiters of their follies.
“I have this old 2006 BusinessWeek framed as a reminder,” Bezos tweeted Thursday, resurrecting a shot of a November 2006 International Business Week cover: “Jeff Bezos’ risky bet. Bezos wants to run your business with the technology behind his Web site. But Wall Street wants him to mind the store”.
“The ‘risky bet’ that Wall Street disliked was AWS (Amazon Web Services), which generated revenue of more than $62 billion last year,” a combative Bezos tweeted.
The timing mattered. Amazon stock is suffering an uncharacteristically severe adjustment after a massive spending binge.
Bezos’s idea was to show the mirror to the pundits.
“Another big idea from Jeff Bezos? Go ahead and groan. It’s fine with him. Even after all these years spent battling back claims that his company would be ‘Amazon.toast,’ he’s still bounding up and down stairs two at a time to exhort his band of nerds on to the Next Big Thing,” the 2006 Business Week piece had talked of him patronisingly.
“Bezos, 42, sounds downright eager to confound a new generation of skeptics. ‘We’re very comfortable being misunderstood,’ he says, letting loose one of his famously thunderous laughs. ‘We’ve had lots of practice’.”
“Amazon is biting off more than it can chew. Some of the new tech projects have come out with a thud,” the Week noted.
“Today, it’s just the same. ‘We are willing to go down a bunch of dark passageways’, he says, ‘and occasionally we find something that really works’.”
“As always, investing in Bezos and his company will require faith that there’s light at the end of his newest tunnel – not just a money pit,” the Week had said unimpressed by the AWS premise.
In 2006, under the AWS banner, Bezos had begun offering IT infrastructure services to businesses in the form of web services – now commonly known as cloud computing. A key benefit on offer was the opportunity to replace up-front capital infrastructure expenses with low variable costs that scale with a client’s business.
With the cloud, businesses no longer needed to plan for and procure servers and other IT infrastructure weeks or months in advance. Instead, what Wall Street pundits missed seeing, they spun up hundreds or thousands of servers in minutes and delivered results faster.
From $177 billion of personal net worth in 2021, Bezos stood at $132.8 billion on the Forbes Real-time Billionaires List Thursday.
(Nikhila Natarajan tracks big tech and tweets @byniknat)