The split of Jeff and MacKenzie Bezos has created a headache for index investors: who gets their shares on Amazon.com Inc.?
The regulatory filings show that Jeff Bezos holds nearly 79 million shares (AMZN) of the company, worth about $ 130 billion as of Thursday.
If MacKenzie is involved in a transaction – or if one of the parties must liquidate its assets to cover the costs of divorce – these could be part of the freely traded shares of the company. In turn, this could strengthen the company's weighting in indexes, especially the S & P 500, which sends tracker funds during a quick buying session on Amazon.
"From the point of view of the index, you would need to sell a bit of everything else and buy from Amazon," said David Dziekanski, portfolio manager at Toroso Investments. "Equity markets will absorb any additional action from Amazon without much price impact."
This is a hypothetical but nevertheless relevant question, since approximately $ 3.4 trillion is tied to the S & P 500, and an additional $ 6.5 trillion uses the gauge as a benchmark. It's the weak methodology that rules indices like the S & P 500 at the center of the stage.
The gauge uses the company's float, rather than the total number of shares outstanding, to determine its weighting in the index. It calculates the free float excluding shares held by the directors and directors of the company, as well as individuals owning 5% or more of a share. business.
Amazon's allocation is therefore adjusted downward to exclude Jeff Bezos' 16% stake. If MacKenzie Bezos renounces his marriage with 24 million shares, a little less than the 5% threshold of S & P, Amazon's float could rise, which would allow the company to take a share more than $ 6 billion, which could generate a reshuffle of $ 6 billion from investors to strengthen their positions.
But S & P's methodology also excludes the shares held by the "related persons" of the company's officers and directors from its float calculation.
The index provider declined to say whether this category would include ex-spouses, a spokeswoman added that the company did not usually comment on individual businesses.
More simply, the float could increase if one or the other Bezos was selling stock to get money. Because it must be recognized, even Amazon can not do cheap divorces.
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