By Jamie Barrie A mazon has become a more aggressive corporate investor with its investment portfolio hitting $1 billion worth of stock in public and private companies for the first time, as of the end of the second quarter. Amazon disclosed that $593 million of the $1 billion invest- ment is in public company equity and equity warrants that give it the right to purchase company stock in the future. The other $407 million worth of stock comes from privately held companies. Last year Amazon reported $338 million of the invest- ment value came from public company stock, with private company shares accounting for $285 million representing a 60 percent increase of $623 million a year ago and a 163 percent increase from the $380 million it disclosed in the same quarter of 2016. This shows that the e-commerce giant is becoming more aggressive with external investments as the company becomes more profitable, cash rich and acquisitive.
It’s not uncommon for big companies to hold a large invest- ment portfolio. Both Salesforce and Microsoft have made major investments in public and private companies that are now worth around $1 billion while Alphabet has disclosed it owns $8.8 billion worth of stock just from privately owned companies alone. So, the size of Amazon’s investment portfolio is still small relative to the company’s overall value. Amazon is worth over $900 billion and holds $130 billion worth of assets, meaning the investment value is less than 1 percent of its total business. We predict that Amazon will continue to make major invest- ments so the company can keep tabs on the latest technol- ogy trends, business models, and rising entrepreneurs by investing in their companies and start ups.
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SPOTLIGHT ON BUSINESS MAGAZINE • AUGUST 2018
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