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A 7% drop wouldn’t be so dramatic for most stocks in the S&P 500. But when it happens to a company worth $ 1.6 trillion – like Amazon.com (AMZN) – massive wealth is destroyed.
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Just ask Jeff Bezos, founder of the e-commerce giant, who recently stepped down as CEO. He is still the number one shareholder in the company: more than 51 million shares or 10% of the company, according to S&P Global Market Intelligence.
But that means the richest person in the world lost over $ 13 billion in a single day. Amazon shares collapsed on Friday after the company’s second quarter earnings report. Amazon topped profit forecast by 23%. But revenue for the quarter was 1.7% lower than forecast.
The result: a $ 130 billion quick wipe out for the third most valued company in the S&P 500. Amazon is widely believed to have the best chance of being the third most valued company in the S&P 500 worth over $ 2 billion. of dollars. It is now worth $ 1.6 billion.
But Bezos is far from alone in feeling the pain, as Amazon is one of the biggest stocks in the S&P 500. The losses extend far.
Amazon.com Pain Isn’t Just Bezos’ Pain
But don’t think the Amazon collapse is just hurting Bezos. Amazon is one of the main holdings of many major ETFs and mutual funds. It also brings you pain.
Vanguard is the second largest holder of Amazon shares with 32.6 million shares, or 6.5% of the company. Many of these holdings are held in 401 (k) accounts of millions of people. And the value of Vanguard’s stake is down $ 8.4 billion just today.
And the # 3 holder of Amazon is Black rock (BLK), which manages the popular iShares ETFs. He owns 28 million shares. That stake is now worth $ 7.2 billion less today.
The spreading pain shows how a few big stocks like Amazon play an oversized role in the S&P 500 and other indices. Amazon alone accounts for 4.2% of the SPDR S&P 500 ETF (SPY). And that’s almost 9% of the Invesco Nasdaq 100 ETF (QQQ).
S&P 500 technology suffers
Amazon.com is technically not a tech action. It’s in the consumer discretionary sector. But that’s part of the host of mega-cap tech-focused stocks so important in this market.
And this key sector of the S&P 500 is collapsing, even after mostly glowing second quarter earnings reports this week. ETF Technology Select Sector SPDR (XLK) lost 1% last week. This is behind the 0.3% drop in the S&P 500. It is also the third worst performance of the 11 sectors during this period.
What’s the worst ? Consumer discretionary Select Sector SPDR (XLY), down 1.2%. And what’s the biggest asset in the Consumer Discretionary ETF? By far: Amazon.com at 24%.
Looks like Bezos has a lot of company in dire straits.
Who loses the most from selling Amazon?
| Incumbent | Common shares held (millions) | % of outstanding shares held | Daily loss (in billions of dollars) |
|---|---|---|---|
| Jeffrey Bezos | 51.2 | 10.2% | $ 13.2 |
| Vanguard group | 32.6 | 6.5 | 8.4 |
| Black rock | 28.0 | 5.6 | 7.2 |
| State Street Global Advisors | 15.9 | 3.1 | 4.1 |
| Price T. Rowe | 15.8 | 3.1 | 4.1 |
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz
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