What will Amazon’s new CEO Andy Jassy bring to the table?
The post What will Amazon (NASDAQ:AMZN) look like in a post-Bezos world? appeared first on The Motley Fool Australia. –
On Monday, we discussed the then-imminent departure of the founder and long time CEO of Amazon.com, Inc. (NASDAQ: AMZN), Jeff Bezos. Monday (our time) was Mr Bezos’ last day as CEO of the company he founded back in 1994.
Yes, anyone aged 27 or under has never experienced a world without Amazon with Bezos at the helm. Amazon now has a new CEO in Andy Jassy. Mr Jassy was formerly the head of one of Amazon’s largest profit engines – Amazon Web Services (AWS).
Bezos steps back from his baby, Amazon
So with Bezos going quietly into the night (well, not entirely, he is set to stay on as company chair), what does the future of the one of the world’s largest and most dominant companies look like? That’s a question that broker eToro is trying to answer.
Josh Gilbert, eToro market analyst, reckons Bezos is “handing the reins to Jassy at a critical time”. He noted that Jassy has been at Amazon for nearly as long as Bezos. Indeed, since his graduation from Harvard Business School in 1997. He also notes that Jassy was one of the architects behind AWS in the first place, and has helped it grow into “a crucial role in Amazon’s overall income… [which accounts for] 47 per cent of Amazon’s overall operating income”.
Here’s some more of what he had to say:
The company has grown from strength-to-strength, with revenues surging each year. However, this sort of growth often attracts scrutiny, which we have seen from antitrust regulators globally. The regulators’ plan is to ‘de-monopolise companies such as Amazon with the capital and power to buy any competitor that stands in its way, which Jassy will have to suppress.
Bezos’ leadership has also come under fire previously, with employees saying targets took a physical toll on their health. Jassy will undoubtedly have his work cut out in areas like these. Despite this, it’s expected that Jassy’s softer personality could work in Amazon’s favour. I believe that Jassy will add a character that we haven’t seen from Amazon before, making it a more friendly and appealing company.
What can investors expect in the age of Jassy?
But what about Amazon’s legion of loyal investors? What can they expect from Amazon now that one of the world’s greatest wealth creators in Bezos is stepping back? Gilbert is equally sanguine:
Will this change in leadership detrimentally affect Amazon’s share price? It’s unlikely. It will be interesting to see how he plans to structure the business moving forward. Coming from the AWS background, Jassy will likely target cloud computing growth and look to increase revenues in this segment of the company.
The business also recently made its biggest acquisition ever, purchasing MGM [film studio Metro-Goldwyn-Mayer] for around USD$8 billion, so Jassy will be keen to grow its entertainment business to challenge the likes of Netflix and Disney+ further. With Bezos remaining an executive board member, he will likely continue to have a say in some of the company’s big decisions.
If Amazon’s growth continues along the same trajectory with Jassy at the helm, investors are likely to enjoy a few more years of profitable returns. Investors don’t seem too bothered by the departure of Bezos to greener pastures. This morning (out time), Amazon shares closed at US$3,675.74 a share, just after making a new all-time high of US$3,685.48. That gives Amazon a market capitalisation of US$1.85 trillion.
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John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Motley Fool contributor Sebastian Bowen has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. owns shares of and has recommended Amazon. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has recommended the following options: long January 2022 $1,920 calls on Amazon and short January 2022 $1,940 calls on Amazon. The Motley Fool Australia has recommended Amazon. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.