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Amazon Stock Meltdown Costs Jeff Bezos (And You) $130 Billion

A 7% drop wouldn’t be all that spectacular for most S&P 500 stocks. But when it happens to a company worth $1.6 trillion — like Amazon.com (AMZN) — some 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’s still the No.1 holder of the company’s stock: more than 51 million shares or 10% of the company, says S&P Global Market Intelligence.

But that means the world’s richest person lost more than $13 billion in just one day. Shares of Amazon are cratering Friday following the company’s second-quarter profit report. Amazon topped profit forecasts by 23%. But revenue for the quarter came in 1.7% lighter than expected.

The result: A swift wipeout of $130 billion in value for the third most valuable company in the S&P 500. Amazon is widely thought to have the best chance to be the third S&P 500 company worth more than $2 billion. It’s now worth $1.6 billion.

But Bezos is far from being alone feeling the pain, as Amazon is one of the most important stocks in the S&P 500. The losses stretch far and wide.

Amazon.com Pain Isn’t Just Bezos’

But don’t think Amazon’s meltdown is only hurting Bezos. Amazon is a top holding of many major ETFs and mutual funds. That brings the pain to you, too.

Vanguard is the No. 2 holder of Amazon stock 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 No. 3 holder of Amazon is BlackRock (BLK), which runs the popular iShares ETFs. It owns 28 million shares. That stake is now worth $7.2 billion less today.

The spreading pain highlights just how a few big stocks like Amazon play oversized roles in the S&P 500 and other indexes. Amazon alone accounts for 4.2% of the SPDR S&P 500 ETF (SPY). And it’s almost 9% of the Invesco Nasdaq 100 ETF (QQQ).

S&P 500 Tech Is Suffering

Amazon.com isn’t technically a tech stock. It’s in the consumer discretionary sector. But it’s part of the mega-cap tech-focused crowd of stocks so important in this market.

And this key S&P 500 sector is sputtering, even following mostly glowing second-quarter profit reports this week. The Technology Select Sector SPDR ETF (XLK) is down 1% in the past week. That’s lagging the S&P 500’s 0.3% decline. It’s also the third worst showing of all 11 sectors in that time.

What’s the worst? Consumer Discretionary Select Sector SPDR (XLY), off 1.2%. And what’s the top holding in the consumer discretionary ETF? By far: Amazon.com at 24%.

Looks like Bezos has plenty of company in misery.

Who’s Losing The Most From Amazon’s Sell-Off?

Holder Common stock held (millions) % of shares outstanding owned Daily loss ($ billions)
Jeffrey Bezos 51.2 10.2% $13.2
Vanguard Group 32.6 6.5 8.4
BlackRock 28.0 5.6 7.2
State Street Global Advisors 15.9 3.1 4.1
T. Rowe Price 15.8 3.1 4.1
Sources: IBD, S&P Global Market Intelligence
Follow Matt Krantz on Twitter @mattkrantz

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