Amazon CEO Stands To Benefit From Google IPO
Jeff Bezos, CEO of Amazon.com, was one of the first five outside investors into what was a fledgling start-up search engine named Google. Bezos made his investment in 1998, and the result of his support was that Google entitled him to an undisclosed amount of stock at 6 cents a share.
The amount of the stock that Bezos purchased is unknown, although shortly after the company incorporated, Google sold 15.36 million Series A shares, for a total of $960,000.
Fast-forward to 2004. Google has filed their papers to become a publicly traded company. Within this filing, Bezos is named as one of the five investors that holds Series A preferred stock. Owners of the Series A stock are allowed to convert their stock into the equivalent number of common shares.
Google’s estimated stock market value is the neighborhood of $25 billion. This breaks down into $95 a share. Those that were fortunate enough to have bought Google’s stock at 6 cents a share now stand to increase their investment 1500 fold. In case you missed that, I said a 1500 fold return.
Bezos is listed on Forbes magazine’s ranking of the richest people in the world. As of the latest list, Bezos resides at the 82nd spot. His Google investment is about to bump him up a few places, to be sure. Not only does Bezos have entitlements to the Series A stock, he also bought into Google’s class B stock. Bezos along with 18 other investors purchased a total of 49.8 million shares at 49.5 cents a share.
Google class B stock also converts to the equivalent number of common stocks. However, holders of class B stock are allowed ten votes per stock they own, whereas common stock holders have 1 vote per stock. This was done in order for Google’s founders to keep a level of control over their product.
Thanks to SearchEngineLowdown for the information.