Billionaires: Jeff Bezos offloads second tranche of Amazon stock worth $2.4bn

In our fortnightly round-up, Sam Zell hedges against inflation with gold and the wife of late Samsung chairman boosts her fortune to more than $7bn

Amazon founder Jeff Bezos offloaded about $2.5 billion of Amazon stock in his first big disposal this year. AFP

Jeff Bezos

Amazon founder and chief executive Jeff Bezos sold a second tranche of Amazon stock worth $2.4 billion on Friday, bringing the amount he has unloaded this week to about $5bn.

Mr Bezos disposed of 739,032 shares under a pre-arranged trading plan, according to US Securities and Exchange Commission filings, days after he sold an identical amount. He revealed in a filing last week that he plans to sell as many as 2 million shares.

It was his second big disposal of the year after he offloaded more than $10bn worth of shares last year.

Mr Bezos sold 739,000 shares on Wednesday under a pre-arranged trading plan, according to SEC filings.

The world’s richest person continues to hold more than 10 per cent of Amazon, the primary source of his $191.3bn fortune, according to the Bloomberg Billionaires Index.

In the 15 years after Amazon.com went public in 1997, Mr Bezos sold about a fifth of the online retailer for about $2bn. The value of his stake has ballooned in recent years to such an extent that he can now sell relatively small amounts for billions of dollars.

Amazon stock is little changed this year after rallying 76 per cent last year as the Covid-19 pandemic kept people away from physical shops and encouraged online shopping.

Mr Bezos has used stock sales to fund rocket company Blue Origin. He has also committed $10bn to the “Bezos Earth Fund” to help counter the effects of climate change.

Blue Origin said last Wednesday that it plans to send its first manned mission to space on July 20 and will auction off one seat on its New Shepard rocket.

Mr Bezos would be far richer if it were not for his divorce from MacKenzie Scott. She received a 4 per cent stake in Amazon as part of the split and quickly became one of the world’s most important philanthropists.

Sam Zell

Billionaire investor Sam Zell is seeing inflation everywhere and has bought gold as a hedge – something he says he used to knock others for doing.

“Obviously, one of the natural reactions is to buy gold,” he told Bloomberg Television. “It feels very funny because I have spent my career talking about why would you want to own gold? It has no income, it costs to store. And yet, when you see the debasement of the currency, you say: 'what am I going to hold on to?'”

Mr Zell, 79, says he is concerned not only about the US dollar but also other countries printing money as well. He questioned whether inflation would be transitory, as Federal Reserve chairman Jerome Powell recently indicated.

“Oh boy, we are seeing it all over the place,” Mr Zell says of inflation. “You read about lumber prices, but we are seeing it in all of our businesses. The obvious bottlenecks in the supply chain arena are pushing up prices. It is very reminiscent of the 70s.”

While gold is an attractive investment, opportunities in fossil fuels are not, says Mr Zell, who in 2019 agreed to set up a joint venture with Tom Barrack Jr’s Colony Capital to invest in oil and gas.

“Right now, oil and gas are not priced to reflect the risk of what is going on, whether it be in the electric vehicle world, a climate-changed world,” he says. “As recently as a couple of years ago, I thought the risk-reward ratio was appropriate. It is clearly become very inappropriate as our political situation has changed.”

Mr Zell also says he is concerned about renewable energy undermining the reliability of power grids, pointing to the recent blackouts in California and Texas.

In property, there are plenty of questions about what demand will look like over the next couple of years in the office, lodging and retail sectors, says Mr Zell.

“Everybody is worried about going back to work and office-space occupancy. I do not think that is really an issue,” he says.

“The problem is that, before the pandemic, we were dealing with an oversupply of office space. Obviously the pandemic has not reduced that oversupply and has probably encouraged it accordingly.”

Hong Ra-hee

The fortune of Hong Ra-hee, the wife of Samsung Group chairman Lee Kun-hee, grew to more than $7bn after she received shares worth billions of dollars in the much-awaited transfer of her husband’s assets.

Ms Hong, 75, inherited about 83 million shares in Samsung Electronics, making her the largest individual shareholder in the technology company with a 2.3 per cent stake, according to a recent filing. Ms Hong is the richest woman in South Korea with a net worth of $7.4bn, according to the Bloomberg Billionaires Index.

It is another consequence of the massive passing of wealth after Lee’s death, which resulted in his son Lee Jae-yong cementing control over the group after his holdings rose significantly in key affiliates. The late Lee’s only son is worth $12.6bn, according to the index, while the wealth of his sisters Boo-jin and Seo-hyun swelled to $5bn and $4.4bn, respectively.

“It is a win-win situation for the family members,” said Park Ju-gun, head of Seoul research company Leaders Index. “It has ensured more stable control for Lee Jae-yong, while other family members get more of a voice with their increased stakes.”

A Samsung Electronics spokeswoman declined to comment on the family’s net worth.

The drama over succession at South Korea’s largest company has gripped the country since the patriarch and longtime head of Samsung Electronics suffered a heart attack in 2014. His son has been accused in two different lawsuits of illegal behaviour to ensure control over the conglomerate and is currently serving a jail sentence after a conviction for bribery in the first case.

Ms Hong received the biggest slice of her husband's stake in Samsung Electronics as it was divided in a 3:2:2:2 ratio between her and her three children. Ms Hong received about 33 per cent of the shareholding while her children each received about 22 per cent, according to the legally prescribed ratio.

Stock holdings in the conglomerate’s other key affiliates, its de facto holding company Samsung C&T and Samsung SDS, were transferred according to the same ratio.

However, Lee Jae-yong was able to tighten his grip as he received half his father’s shares in Samsung Life Insurance, raising his stake to more than 10 per cent from 0.06 per cent. Samsung Life owns 8.5 per cent of Samsung Electronics.

Last week, the family announced its plans to pay one of the country's largest inheritance-tax bills – at more than 12 trillion won ($10.7bn). It also intends to donate 1tn won to medical centres and about 23,000 works of art, including pieces by Pablo Picasso and Claude Monet.

Ms Hong led Samsung's Leeum museum, which houses works such as Jean-Michel Basquiat's Untitled (Black Figure) and Gerhard Richter's Two Candles. She resigned as director in 2017, and has not taken any management roles at Samsung companies.

“It is an extraordinary concentration of wealth,” says Mr Park. “This single family’s fortune creates inequality, even among conglomerates.”

Arnaud Lagardere

French billionaire Arnaud Lagardere has agreed to relinquish control over his media empire, which includes the Hachette publishing house, amid mounting pressure from investors and influential business tycoons.

The Lagardere group includes Hachette, the Relay chain of airport and railway station newsagents, as well as Paris Match magazine, Europe 1 radio station and other media outlets.

Mr Lagardere had for years resisted attempts by British hedge fund investor Amber Capital to loosen his grip on the company he has run since the death of his father Jean-Luc in 2003.

While only holding 7 per cent of shares after years of selling his stock, Mr Lagardere retained veto power over the group under an arcane legal structure that acted as a shield against takeover attempts.

But on Wednesday, the Lagardere group revealed that its supervisory board had “positively received” a proposal to abolish the structure, handing power to shareholders in line with their shareholdings.

Rival French tycoons Bernard Arnault of the LVMH luxury goods conglomerate and industrialist and media magnate Vincent Bollore have built up stakes in the group.

French media have speculated about a breakup of the Lagardere empire, with Mr Arnault and Mr Bollore competing to buy parts of the business.

The changes to the company’s corporate governance will be put to a vote at a board meeting on June 30.

Under the reform, Mr Lagardere will remain chief executive of the company for six years and will receive a payout in new shares equal to about 7 per cent of the group’s capital.

“I am sincerely very, very happy about this turn of events. It is a change that I wanted and for which I take responsibility, without qualms or regrets,” says Mr Lagardere.

The Lagardere group has been hard hit by the Covid-19 pandemic, which has ravaged its travel retail revenues. In January, it received a rescue package of about €500m ($606m) that was underwritten by the French state.