Billionaires, blocks & stocks: super rich shareholders cash in

Equities
Investments

Some of the world’s richest shareholders are reaping major windfalls from equities sales in 2021.

According to research by Bloomberg, the likes of Amazon’s Jeff Bezos and Google’s Sergey Brin are turning to stock sales to improve their already substantial fortunes.

A 14-month long bull market is helping industry insiders cash in. $24.4bn worth of equities have been offloaded in the period up to the first half of May 2021, compared against the $30bn sold in the same manner throughout the whole of 2020.

The bulk of these sales have been undertaken via trading programmes, a common practice for shareholders of this status.

Usually, large shareholders will sell stock in planned intervals. However, it’s the prolonged stock market rally that’s really made these deals pay off. Whether they were planned or just coincided with the current equities boom is up for debate. The key motivations to sell now are:

  • Valuations coming under pressure from rising inflation
  • Investors becoming wary of potential tighter post-Covid measures from the Fed
  • Joe Biden’s proposed capital gains tax hike

Who is selling?

The following names were mentioned by Bloomberg has being key stock sellers:

  • Jeff Bezos – Sold $6.7bn worth of Amazon shares in 2021
  • Mark Zuckerberg – Sold $1.67bn worth of Facebook shares since November 2021 through the Chan Zuckerberg Foundation charity
  • Larry Ellison – Sold $552.3m Oracle shares
  • Charles Schwab – Sold $192 worth of shares in his eponymous brokerage
  • Sergei Brin – $163m worth of Alphabet stock
  • Eric Yuan – Sold $185m of Zoom shares

One thing to note is that all of the above are involved in big tech players. Typically, such entrepreneurs’ portfolios are heavily weighted to tech stocks. It’s where they generate their wealth after all. However, divesting such levels of stocks makes sense. It’s rarely a great idea to bet solely on one horse, even if said horse has made you a multi-billionaire.

These stock sales will have further ripples away from equities markets. Hundreds of millions could be about to be poured into areas like art, real estate, and philanthropy.

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