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Jeff Bezos to step down as Amazon CEO, Andy Jassy to take over in Q3

Jassy joined Amazon in 1997 and has led Amazon’s Web Services cloud team since its inception.

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Amazon CEO Jeff Bezos will leave his post later this year, turning the helm over to the company’s top cloud executive, Andy Jassy, according to an announcement Tuesday. Bezos will transition to executive chairman of Amazon’s board.

Bezos, 57, founded Amazon in 1994 and has since morphed the one-time online bookstore into a mega-retailer with global reach in a slew of different categories from gadgets to groceries to streaming. Amazon surpassed a $1 trillion market cap under Bezos’ leadership in January of last year — it’s now worth more than $1.6 trillion.

The company had kept its succession plans quiet, though onlookers speculated that either Jassy or Jeff Wilke, CEO of Amazon’s worldwide consumer business, would be Bezos’ eventual successor. In August Amazon announced Wilke will retire in 2021. Jassy, 53, will become CEO in the third quarter.

Jassy joined Amazon in 1997 and has led Amazon’s Web Services cloud team since its inception. AWS continues to drive much of Amazon’s profit.

“I’m excited to announce that this Q3 I’ll transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO,” Bezos said in a letter to employees. “In the Exec Chair role, I intend to focus my energies and attention on new products and early initiatives. Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.”

The news came alongside an earnings report in which Amazon posted its first $100 billion quarter. AWS, under Jassy, reported 28% revenue growth for the fourth quarter. About 52% of Amazon’s operating income was attributed to AWS as of October 2020.

Shares of Amazon were up about 1% in extended trading Tuesday on the back of the earnings report and the C-suite news. The company’s stock has gained about 4% so far in 2021 and is up nearly 70% in the last 12 months.

Amazon’s chief financial officer, Brian Olsavsky, said on a media call that the executive change was decided in consultation with Amazon’s board of directors. He said Bezos will remain very involved and have his fingerprints on lots of different parts of the company. Olsavsky said Jassy is a visionary leader who will bring his own skill set but that Amazon expects a lot of continuity with the transition.

Andy Jassy, CEO of Amazon Web Services.

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Jassy will need to guide the company through antitrust concerns once he takes the reins. In October, after a 16-month investigation into competitive practices at big tech companies including Amazon, the House Judiciary subcommittee on antitrust concluded that Amazon, Apple, Facebook and Google enjoy monopoly power. Amazon is also facing antitrust complaints in the EU.

Rep. Ken Buck, R-Colo., a member of the House Judiciary Committee, said on Twitter shortly after the announcement that he has questions for Jassy, hinting at an early hurdle when Jassy is installed.

Bezos said he will stay engaged in important Amazon projects but will also have more time to focus on the Bezos Earth Fund, his Blue Origin spaceship company, The Washington Post and the Amazon Day 1 Fund.

“As much as I still tap dance into the office, I’m excited about this transition,” Bezos said in his internal announcement. “Millions of customers depend on us for our services, and more than a million employees depend on us for their livelihoods. Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else.”

Industry CEOs and Amazon competitors congratulated Bezos and Jassy on the coming transition, with Microsoft CEO Satya Nadella calling Jassy’s promotion “well-deserved.”

Alphabet CEO Sundar Pichai offered Bezos “best wishes” on his other projects.

Here’s the full letter from Bezos to Amazon employees:

Fellow Amazonians:

I’m excited to announce that this Q3 I’ll transition to Executive Chair of the Amazon Board and Andy Jassy will become CEO. In the Exec Chair role, I intend to focus my energies and attention on new products and early initiatives. Andy is well known inside the company and has been at Amazon almost as long as I have. He will be an outstanding leader, and he has my full confidence.

This journey began some 27 years ago. Amazon was only an idea, and it had no name. The question I was asked most frequently at that time was, “What’s the internet?” Blessedly, I haven’t had to explain that in a long while.

Today, we employ 1.3 million talented, dedicated people, serve hundreds of millions of customers and businesses, and are widely recognized as one of the most successful companies in the world.

How did that happen? Invention. Invention is the root of our success. We’ve done crazy things together, and then made them normal. We pioneered customer reviews, 1-Click, personalized recommendations, Prime’s insanely-fast shipping, Just Walk Out shopping, the Climate Pledge, Kindle, Alexa, marketplace, infrastructure cloud computing, Career Choice, and much more. If you get it right, a few years after a surprising invention, the new thing has become normal. People yawn. And that yawn is the greatest compliment an inventor can receive.

I don’t know of another company with an invention track record as good as Amazon’s, and I believe we are at our most inventive right now. I hope you are as proud of our inventiveness as I am. I think you should be.

As Amazon became large, we decided to use our scale and scope to lead on important social issues. Two high-impact examples: our $15 minimum wage and the Climate Pledge. In both cases, we staked out leadership positions and then asked others to come along with us. In both cases, it’s working. Other large companies are coming our way. I hope you’re proud of that as well.

I find my work meaningful and fun. I get to work with the smartest, most talented, most ingenious teammates. When times have been good, you’ve been humble. When times have been tough, you’ve been strong and supportive, and we’ve made each other laugh. It is a joy to work on this team.

As much as I still tap dance into the office, I’m excited about this transition. Millions of customers depend on us for our services, and more than a million employees depend on us for their livelihoods. Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else. As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions. I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organizations can have.

Amazon couldn’t be better positioned for the future. We are firing on all cylinders, just as the world needs us to. We have things in the pipeline that will continue to astonish. We serve individuals and enterprises, and we’ve pioneered two complete industries and a whole new class of devices. We are leaders in areas as varied as machine learning and logistics, and if an Amazonian’s idea requires yet another new institutional skill, we’re flexible enough and patient enough to learn it.

Keep inventing, and don’t despair when at first the idea looks crazy. Remember to wander. Let curiosity be your compass. It remains Day 1.

Jeff

Source: https://www.cnbc.com/2021/02/02/jeff-bezos-to-step-down-as-amazon-ceo-andy-jassy-to-take-over-in-q3.html

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RH beats earnings, hikes outlook as retail rebound boosts high-end home goods; shares jump

Shares of the high-end furniture retailer surged Wednesday after the company beat analysts’ profit and sales estimates for the fiscal first quarter.

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Jason Kempin | Getty Images Entertainment | Getty Images

Shares of the high-end furniture retailer RH surged in extended trading Wednesday after the company beat analysts’ profit and sales estimates for the fiscal first quarter.

RH also hiked its full-year outlook, building on the momentum it’s seeing in the luxury home category, and gave a stronger-than-expected sales forecast for the second quarter.

In a letter to shareholders, Chief Executive Officer Gary Friedman said the remainder of this year “will surely be a tale of two halves” for the retail industry. But he said that “the un-masking of the general public could lead to a Roaring Twenties type of consumer exuberance.”

The company’s stock was last up more than 7%.

Here’s how RH did in the quarter ended May 1 compared with what analysts were anticipating, using Refinitiv estimates:

  • Earnings per share: $4.89 adjusted vs. $4.10 expected
  • Revenue: $861 million vs. $758 million expected

RH’s net income for the fiscal first quarter grew to $130.7 million, or $4.19 per share, compared with a loss of $3.2 million, or 17 cents per share, a year earlier. Excluding one-time adjustments, it earned $4.89 per share, topping expectations for $4.10.

Revenue surged 78% to $861 million from $483 million a year earlier. That also beat expectations for $758 million.

Friedman said that a strong housing and renovation market, a record stock market, low interest rates, and the reopening of the U.S. economy all bode well for the company in the quarters ahead.

RH hiked its fiscal 2021 outlook for revenue growth to a range of 25% to 30%, compared with a prior range of 15% to 20%. Analysts had been looking for a 19.7% increase year over year.

For its fiscal second quarter, RH expects revenue to grow 35% to 37%. Analysts had been looking for a 27.2% jump.

The company is preparing to kick off its global expansion in the spring of 2022, starting with England. To drive future growth, it is also considering expanding into new services, potentially into areas such as landscape architecture. It currently offers interior design consulting.

RH shares are up roughly 37% year to date. The company has a market cap of about $13 billion.

Find the full earnings press release from RH here.

Source: https://www.cnbc.com/2021/06/09/rh-earnings-q1-2021.html

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Blue Origin auctions seat on first spaceflight with Jeff Bezos for $28 million

The winning bidder will fly to the edge of space with the Amazon founder on Blue Origin’s New Shepard rocket scheduled to launch on July 20.

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A New Shepard rocket launches on a test flight.

Blue Origin

Jeff Bezos‘ space venture Blue Origin auctioned off a seat on its upcoming first crewed spaceflight on Saturday for $28 million.

The winning bidder, whose name wasn’t released, will fly to the edge of space with the Amazon founder and his brother Mark on Blue Origin’s New Shepard rocket scheduled to launch on July 20. The company said it will reveal the name of the auction winner in the coming weeks.

Bidding opened at $4.8 million but surpassed $20 million within the first few minutes of the auction. The auction’s proceeds will be donated to Blue Origin’s education-focused nonprofit Club for the Future, which supports kids interested in future STEM careers.

Blue Origin director of astronaut and orbital sales Ariane Cornell said during the auction webcast that New Shepard’s first passenger flight will carry four people, including Bezos, his brother, the auction winner and a fourth person to be announced later.

Autonomous spaceflight

New Shepard, a rocket that carries a capsule to an altitude of over 340,000 feet, has flown more than a dozen successful test flights without passengers, including one in April at the company’s facility in the Texas desert. It’s designed to carry up to six people and flies autonomously — without needing a pilot. The capsule has massive windows to give passengers a view of the earth below during about three minutes in zero gravity, before returning to Earth.

Blue Origin’s system launches vertically, and both the rocket and capsule are reusable. The boosters land vertically on a concrete pad at the company’s facility in Van Horn, Texas, while the capsules land using a set of parachutes.

The interior of the latest New Shepard capsule

Blue Origin

Bezos founded Blue Origin in 2000 and still owns the company, funding it through share sales of his Amazon stock.

July 20 is notable because it also marks the 52nd anniversary of the Apollo 11 moon landing.

Branson and Musk

VSS Unity fires its rocket engine shortly after launching on its third spaceflight on May 22, 2021.

Virgin Galactic

Bezos and fellow billionaires Elon Musk and Sir Richard Branson are in a race to get to space, but each in different ways. Bezos’ Blue Origin and Branson’s Virgin Galactic are competing to take passengers on short flights to the edge of space, a sector known as suborbital tourism, while Musk’s SpaceX is launching private passengers on further, multi-day flights, in what is known as orbital tourism.

Both Blue Origin and Virgin Galactic have been developing rocket-powered spacecraft, but that is where the similarities end. While Blue Origin’s New Shepard rocket launches vertically from the ground, Virgin Galactic’s SpaceShipTwo system is released mid-air and returns to Earth in a glide for a runway landing, like an aircraft.

Virgin Galactic’s system is also flown by two pilots, while Blue Origin’s launches without one. Branson’s company has also flown a test spaceflight with a passenger onboard, although the company has three spaceflight tests remaining before it begins flying commercial customers – which is planned to start in 2022.

SpaceX launches its Crew Dragon spacecraft to orbit atop its reusable Falcon 9 rocket, having sent 10 astronauts to the International Space Station on three missions to date.

In addition to the government flights, Musk’s company is planning to launch multiple private astronaut missions in the year ahead – beginning with the all-civilian Inspiration4 mission that is planned for September. SpaceX is also launching at least four private missions for Axiom Space, starting early next year.

Blue Origin’s auction may have netted $28 million, but a seat on a suborbital spacecraft is typically much less expensive. Virgin Galactic has historically sold reservations between $200,000 and $250,000 per ticket, and more recently charged the Italian Air Force about $500,000 per ticket for a training spaceflight.

Musk’s orbital missions are more costly than the suborbital flights, with NASA paying SpaceX about $55 million per seat for spaceflights to the ISS.

SpaceX’s Crew Dragon spacecraft named “Resilience” is seen docked to the International Space Station.

NASA

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The winning bidder, whose name wasn’t released, will fly to the edge of space with the Amazon founder and his brother Mark on Blue Origin’s New Shepard rocket scheduled to launch on July 20. The company said it will reveal the name of the auction winner in the coming weeks.

Source: https://www.cnbc.com/2021/06/12/jeff-bezos-blue-origin-auctions-spaceflight-seat-for-28-million.html

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GameStop sales rise 25% as retailer chases e-commerce growth, says it may sell 5 million shares

GameStop sales rose 25% in the fiscal first quarter as the company focuses on e-commerce and tries to stage a turnaround.

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SELINSGROVE, PENNSYLVANIA, UNITED STATES – 2021/01/27: A woman walks past the GameStop store inside the Susquehanna Valley Mall. An online group sent share prices of GameStop (GME) and AMC Entertainment Holdings Inc. (AMC) soaring in an attempt to squeeze short sellers.

Photo by Paul Weaver/SOPA Images/LightRocket via Getty Images

GameStop‘s sales rose 25% in the fiscal first quarter, as the video game retailer embarks on a turnaround strategy partially fueled by a Reddit-inspired stock rally. The company also named former Amazon executive Matt Furlong as its new CEO.

Shares fell more than 12% in extended trading on Wednesday, after the company declined to provide an outlook for the year and said it may sell as many as 5 million shares.

Here’s how the company did for the fiscal first quarter ended May 1, compared with Refinitiv consensus estimates:

  • Loss per share: 45 cents per share adjusted vs. 84 cents expected
  • Revenue: $1.28 billion vs. $1.16 billion expected

In the quarter, GameStop reported that its net loss narrowed to $66.8 million, or $1.01 per share, from a loss of $165.7 million, or $2.57 per share, a year earlier. Excluding items, the company had a loss of 45 cents per share. Analysts were expecting GameStop to report a loss of 84 cents per share, according to Refinitiv.

Total revenue grew to $1.28 billion from $1.02 billion a year earlier, topping Wall Street’s expectations of $1.16 billion.

The company declined to provide a forecast for the year. It said sales momentum continued into the second quarter, with total sales in May increasing about 27% compared with the same month a year ago.

GameStop filed a prospectus with the Securities and Exchange Commission to sell up to 5 million shares of its stock from time to time, in “at-the-market” offerings. The funds it raises through these stock sales will be used for general corporate purposes, investing in growth initiatives and strengthening its balance sheet, the company said.

As of May 1, GameStop said, it had paid off its long-term debt and no longer had any borrowings under its asset-based revolving credit facility.

The video game retailer’s stock has gyrated wildly over the past several months as retail traders have shared tips on Reddit and tried to fuel short squeezes for companies including GameStop, AMC Entertainment, Bed Bath & Beyond and Clover Health — collectively the group has become known as meme stocks.

GameStop’s shares are up 1,506% so far this year. Its shares have swung from a 52-week low of $3.77 to a 52-week high of $483. As of Wednesday’s close, shares were $302.56. Its market value is $21.41 billion.

The trading frenzy has gotten the attention of the SEC. In a filing Wednesday, GameStop said it had received a request from the SEC on May 26 to voluntarily provide documents and information. The company said it was reviewing that request and planned to cooperate.

GameStop has tried to catch investors’ attention in other ways, as it focuses more on e-commerce and poaches talent from other companies. This spring, it tapped Chewy co-founder Ryan Cohen to lead efforts to grow the online business. He was named chairman at a shareholder meeting Wednesday. The company also hired several former Amazon executives, including Jenna Owens, its new chief operating officer; Matt Francis, its first chief technology officer; and Elliott Wilke, its chief growth officer.

Yet some analysts are unconvinced that the longtime brick-and-mortar retailer can pivot its business and believe the company has been propped up by speculation.

Loop Capital analyst Anthony Chukumba dropped his coverage of GameStop earlier this year following the Reddit frenzy. He told CNBC that the video game retailer’s challenges run deep regardless of who it hires.

“It’s great that these guys worked at Amazon. Amazon is a very successful retailer that I do cover, that I’m very familiar with, but at the end of the day, GameStop’s problems have very little, if anything, to do with e-commerce,” Chukumba said on CNBC’s “Closing Bell.”

“Their problem is not that they’re not a good omnichannel retailer. The problem is that gamers are increasingly downloading video games,” he added. “Look, they can hire Jeff Bezos when he comes back from space. … It’s not going to make a difference. The symptoms are not aligned with the medicine that the doctor is giving them. You can hire anyone you want from Amazon — not going to make a difference.”

Read the company’s earnings press release here and its CEO announcement here.

— CNBC’s Kevin Stankiewicz contributed to this story.

Correction: GameStop named former Amazon executive Matt Furlong as its new CEO. An earlier version of this story misstated his first name.

Here’s how the company did for the fiscal first quarter ended May 1, compared with Refinitiv consensus estimates:

Source: https://www.cnbc.com/2021/06/09/gamestop-gme-earnings-q1-2021.html

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