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- Jeff Bezos, Jamie Dimon, and Mark Zuckerberg have all sold their companies.
- Amazon’s founder, JPMorgan and Meta’s CEOs are at risk of sending a worrying message to the market.
- Business owners sell stock for a variety of reasons, from taxes and estate planning to personal expenses.
Amazon’s Jeff Bezos, JPMorgan’s Jamie Dimon, and Meta’s Mark Zuckerberg all sold large amounts of stock in their companies. Why?
Bezos is leading the way this month by selling 50 million Amazon shares in just nine business days, netting him an estimated $8.5 billion.
Zuckerberg cashed out about 1.8 million shares in his social media empire for more than $400 million in the last two months of 2023.
JPMorgan’s Mr. Dimon joined the club this month, selling about 822,000 shares of his bank’s stock for about $150 million.
There are several reasons for the phenomenal increase in sales. Mr. Dimon’s disposal will be his first sale of JPMorgan stock in his 18 years as CEO.
Mr. Zuckerberg hadn’t sold any Meta stock in nearly two years before his latest transaction.Mr. Bezos has withdrawn from sales activities. Less than $3 billion Prior to 2019, total annual stock value exceeded $3 billion, in early 2020 it exceeded $3 billion in four days, and has now nearly tripled that amount in nine days.
All sales were based on trading plans announced several months in advance, and based on this plan, management believed that investors were in the dark about upcoming bad news or that the stock price was unsustainable. This allows you to sell stocks without thinking that they are at a high price.
But it’s certainly possible that Mr. Bezos, Mr. Zuckerberg and Mr. Dimon decided to line up a sale as the value of their shares ballooned and cashing out became increasingly reasonable.
Meta stock has soared 186% over the past year, JPMorgan is up nearly 30% and Amazon is up nearly 90%. All three companies are trending at levels close to record highs.
While the upside potential for the trio’s stock prices may be limited going forward, company leaders are making decisions to dispose of them for a variety of reasons. For example, you may have a large tax bill coming up, or you may need cash to cover a big purchase, such as a mansion or a superyacht.
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If virtually all of your assets are in one stock, or if you are rebalancing your stock holdings as part of retirement or estate planning, you may want to diversify your portfolio.
Still, management is well aware of the message selling a large portion of its stock sends to the market. Warren Buffett famously never sold his Berkshire Hathaway stock.
He believes that the fact that he holds more than 99% of his assets in Berkshire stocks means that his interests are aligned with those of shareholders, and that his high level of “interest in the game” says it demonstrates long-term trust and commitment to the company.
It’s worth stressing that Mr. Bezos, Mr. Zuckerberg, and Mr. Dimon’s sales represent only a fraction of their equity, and they are still heavily invested in the success of their respective companies.
But what’s notable is that they aren’t buying any shares. This shows that they believe the best is yet to come, and that they want more exposure for their companies in their personal portfolios.
Instead, they have taken risks and sold their stocks to send a message that their stocks are well valued. And now it’s time to take money off the table.
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