The Shakeup at Amazon Has Some Investors Spooked
The long-awaited departure date of Amazon’s CEO has been announced. Here’s why I still see a bright future for the company.
On Wednesday, Jeff Bezos announced that he will officially step down as the CEO of Amazon.com, Inc. (AMZN) on July 5.
The date was chosen because it is the same date on which Amazon was first incorporated back in 1994.
Since that time, Bezos has shepherded Amazon from a small e-commerce startup to one of the largest companies in the world – making him one of the world’s richest men in the process.
Now, if you just read the headlines, you might be concerned about any AMZN shares you hold.
But what’s important to understand is that Bezos isn’t retiring – and his replacement may even bring some expertise and positive changes that could keep Amazon’s meteoric rise going.
Where’s the money?
Despite the fact that Bezos will be stepping down in just over a month, AMZN stock remained relatively flat after the announcement.
Much of that can likely be attributed to the fact that it’s not really news. Investors have known since February that the CEO was planning on leaving the post – they just didn’t know when.
Bezos will step into his new role as Amazon’s executive chairman following his departure as CEO, so he will remain an important figure within the company.
Filling his shoes will be no easy task – but one for which his replacement, Andy Jassy, has been properly groomed.
Jassy has been a Bezos disciple for years and has built Amazon Web Services (AWS) into a global powerhouse in the cloud computing space. Jassy taking over Amazon could spell big things for the future of AWS. The cloud computing space has some of the biggest profit potential of any industry on the planet, and with Jassy calling the shots, AWS should continue to shine.
But despite a worthy successor, many Amazon investors can’t help but be concerned about the departure of the man that guided Amazon and not only revolutionized the way people shop, but built a tech and entertainment empire.
Here’s why I think those fears are unfounded.
How do I get some?
If Amazon were still a fledgling company – or even just a middle-of-the-road e-commerce name – then Bezos stepping down might scare me.
But over the last decade, Amazon has grown into arguably the most popular and influential company in the U.S. Bezos wrote the playbook for Amazon’s incredible success, and Jassy is more than capable of carrying the torch.
In fact, I could see Amazon performing even better in the future. Due to the seismic shift in the way people operate that the pandemic caused, Amazon’s three core businesses have been positively impacted.
E-commerce has spiked dramatically with people around the globe forced to stay away from malls and stores, and the benefits should continue even as things return to normal. In fact, from January 30, 2020 to April 15 of this year, Amazon added 50 million new Prime subscribers – a 50% increase.
With more and more companies seeing the benefits of work-form-home and mobile capabilities, Amazon Web services should continue to thrive under Jassy’s watch.
And, as we discussed in yesterday’s Profit Pregame, Amazon’s recent deal with MGM opens up a treasure trove of new content to attract subscribers to its streaming service.
So, I’m not sweating Bezos stepping down. In fact, I’ll be closely watching AMZN for any opportunity to buy the dip.
“Dumb Money” is Running Wild
There’s no doubt that trading today is far different from years past.
With the influx of mostly young, novice traders – about 72 million millennials in the United States alone – there’s over $11 million dollars up for grabs every second of every day.
Courtesy of all of that speculative money floating around the market, massive profit opportunities abound. That kind of insane buying power is creating the kind of surges rarely seen before.
And world-renowned trader Tom Gentile has developed an incredibly accurate strategy for predicting those surges and making quick, decisive strikes to come away with incredible gains.
Click here to see the astonishing results so far, and how you can claim your share of the next round.
In the Spotlight: The Housing Bubble Blues?
The housing market hasn’t suffered, to say the least, during the last year. Despite the pandemic shutting most of the world down, Americans have moved in herds to purchase homes – and in turn, we’re seeing a market like we’ve never seen before.
House prices are through the roof, inventory is at an all-time low, and supplies to put more inventory on the market? Well, it’s hitting unthinkable prices. Needless to say, buying a home right now feels a bit like winning the lottery.
And recently, during a Senate hearing, Jamie Dimon (the CEO of JPMorgan Chase) shocked the room when he acknowledged that the housing boom may be getting out of hand.
But unlike ’08 and ’09, Mr. Dimon isn’t sweating it. In fact, he noted he’s not worried about a repeat of the Great Recession at all. And he pointed out that during those years, there was some bad mortgage underwriting and tremendous leverage – that’s not the case for the current economy.
Now, when it comes to my opinion on the housing “bubble” – the only one I have is that when it comes to my trading plan it doesn’t matter. And that’s the power of following the big money and using options to move in and out of positions with ease.
And that’s exactly why I think you should be trusting options during this time too. Because whether it’s a bubble or if this unruly housing market runs on forever – options offer an extra layer of security that every trader needs.