Jeff Bezos shared a note from a couple that bought 2 shares of Amazon in 1997 – and are now using the proceeds to buy a house after the company’s 172,499% post-IPO run

Amazon Jeff Bezos
  • Jeff Bezos shared a note from a couple who bought two shares of Amazon in 1997 in his recent shareholder letter.
  • It’s not specified when the purchase occurred. But if the couple bought shares at the closing price on Amazon’s IPO day, it’s made 172,499%, according to data compiled by Insider.
  • Their son is now selling some of the stock to help purchase a home. The shares have grown in value to more than $80,000.
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In 1997, a couple bought two shares of a new book-selling company for their 12-year-old son. For the years following the purchase, the son wanted to cash in the stock, but the parents insisted he hold.

24 years later, that online book retailer has become one of the largest corporations in the world, and the family has seen a likely six-digit return on their investment.

The couple told their story to Jeff Bezos just as the Amazon founder was sitting down to write his final letter to shareholders as CEO.

In Bezos’ letter published Thursday, he included a copy of the letter from the couple, Mary and Larry, whose surnames were blocked out for privacy.

The letter blurred out the exact date Mary and Larry bought the shares, but detailed how they bought two shares of Amazon in 1997, because that’s all they could afford at the time. The stock split three times within the next two years, leaving the family with 24 shares.

The split-adjusted percentage increase from the close on Amazon’s IPO day to Thursday’s close is 172,449%. That means the family’s 24 shares are now worth roughly $81,098, according to data compiled by Insider.

This year, Mary and Larry’s son Ryan is buying a house and will sell some of the shares to fund the purchase. When Ryan sells the shares, he’ll need to convert the paper shares into digital before selling, Mary and Larry said.

“Those two shares have had a wonderful influence on our family,” said Mary and Larry. “We all enjoyed watching Amazon value grow year after year and it’s a story we love to tell others.”

At the end of the letter they signed: “P.S. We wished we had bought 10 shares!”

The Amazon CEO said that he’s approached with similar stories all the time.

“I know people who’ve used their Amazon money for college, for emergencies, for houses, for vacations, to start their own business, for charity – and the list goes on,” Bezos wrote. “I’m proud of the wealth we’ve created for shareowners. It’s significant, and it improves their lives.”

According to Bezos, Amazon has created $1.6 trillion of wealth for their shareowners. One of the largest beneficiaries has been Bezos himself, who owns $180 billion of Amazon and is the richest person in the world, according to Bloomberg.

Bezos said that his Amazon shares have made him wealthy, but seventh-eighths of the shares, representing $1.4 trillion of wealth creation, are owned by other investors, including pension funds, universities, 401ks, and couples like Mary and Larry.

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Amazon shares dip as investors digest Jeff Bezos’ plan to step down as CEO following blockbuster Q4 earnings

Jeff Bezos

Shares in Amazon dipped on Wednesday after Jeff Bezos announced plans to step down as CEO and transition to executive chairman following a strong fourth-quarter.

The company delivered a strong beat on fourth-quarter earnings as its revenue grew 44%, topping $100 billion in a quarter for the first time. But its shares were trading around 1% lower at $3,348 per share at the market open.

AWS CEO Andy Jassy is to replace Bezos as Amazon’s CEO. Although the company may lose some of the vision of its founder, Amazon is still “very well placed for future growth disrupting more trillion dollar industries,” said Christopher Rossbach, CIO of asset management company J. Stern & Co.

The fact that the company broke records yet again this past holiday season, when its Prime delivery services were in high demand, goes to show that it’s “almost impossible” for any other retailer to match Amazon, Rossbach said. But after a defining year, it could be difficult to replicate the outsized growth it had in 2020.

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Investors must focus on the Amazon Prime membership base, which is expected to double in market share over the next decade, helping its stock rocket higher, he said.

Further, incoming CEO Jassy’s ascension from the AWS team is seen as a positive for Amazon.

Jassy fully understands the wealth of assets across Amazon’s flywheel of operations and the move should afford Bezos more time to focus on big new bets for the company, according to Nicholas McQuire, vice president of enterprise research at CCS Insight.

“The key question will be how Jassy manages some of the inevitable bumps in the road Amazon will face with issues like anti-trust, workers’ rights and employee activism on this rise,” he said.

Separately, Wedbush raised its price target on Amazon to $4,000 from $3,900 on Wednesday and reiterated an “outperform” rating. Analysts said it wasn’t clear Bezos would actually withdraw from day-to-day oversight of the business, and expected him to continue to be integrally involved in company strategy. 

Amazon’s stock has jumped roughly 70% over the past year. But since its last reported earnings in October, the stock has seen only a 6% increase, well below the broader S&P 500’s 16% rise in the same period.

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