Amazon unlikely to take hit from Jeff Bezos controversy, say experts

Amazon is unlikely to be affected by controversy engulfing its chief executive Jeff Bezos, according to analysts.

The world’s richest man revealed in a tweet several weeks ago that he and his wife of 25 years were divorcing, but a tabloid then claimed he had been having an affair and it released text messages and photos of him and his mistress.

And now Mr Bezos is accusing The National Enquirer in a blog post of trying to blackmail him by threatening to release more intimate photos unless he calls off an investigation into how that information was obtained in the first place.

Investors won't care.

But despite the all-consuming personal drama, experts do not expect it to make much difference to Amazon itself, the company Mr Bezos has steered from an online bookshop two decades ago to a worldwide juggernaut.

Michael Pachter, an analyst at Wedbush Securities, estimates the impact on the company to be “0.000 percent” as “investors won’t care”.

Others point out that Mr Bezos has been able to balance his responsibilities at the helm of the world’s largest online retailer while also juggling his other pursuits: running a space exploration company and owning the Washington Post.

“He’s extraordinarily driven,” said Chris McCabe, who runs a consultancy for Amazon sellers. “He knows how to delegate.”

Amazon has a number of executives who are running each of its businesses, and experts say that fact is likely to keep investors calm.

But that has not stopped the Enquirer from casting doubt over whether Mr Bezos can effectively oversee his company.

“All of these (text) messages raise serious questions about Bezos’s judgment as the CEO of the most valuable company in the world,” the tabloid said in an article on January 24.

I think as long as customers can get their Nespresso pods within 48 hours, they don't care.

Seattle-based Amazon has declined to comment on Mr Bezos. The company’s stock did not take a big hit, slipping 1.6% at Friday’s close.

Meanwhile, the Enquirer’s publisher American Media is disputing Mr Bezos’s claims that it used “extortion and blackmail” in reporting its story, saying it “acted lawfully”.

In his blog post on Thursday, Mr Bezos defended his ability to lead Amazon: “I founded Amazon in my garage 24 years ago, and drove all the packages to the post office myself. Today, Amazon employs more than 600,000 people, just finished its most profitable year ever, even while investing heavily in new initiatives, and it’s usually somewhere between the #1 and #5 most valuable company in the world. I will let those results speak for themselves.”

He also said he wants to focus on work, noting that the person he hired to handle the investigation into how his texts were leaked to the Enquirer will also be tasked with “protecting” his time.

Mr Bezos’s indiscretions are seen more as a personal matter rather than one to do with the company, unlike Tesla boss CEO Elon Musk, for example, whose behaviour has caused the electric car maker’s stock to rise and fall.

Mr Musk was recently stripped of his chairman title and forced to pay millions of pounds in a penalty to the Securities and Exchange Commission for allegedly duping investors with tweets about a plan to take the company private.

Neil Saunders, the managing director at GlobalData Retail, said of the Bezos affair: “This is very much a matter of Jeff Bezos. It’s not really anything to do with running with the company.”

And Amazon’s shoppers, meanwhile, are not likely to take notice.

“I think as long as people can get their Nespresso pods within 48 hours, they don’t care,” Scott Galloway, a marketing professor at NYU Stern School of Business, said.

- Press Association


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