This Billionaire Founder Sold Over $13 Billion of His Company's Stock This Year Alone. Should Investors Be Worried?

Some numbers are so big that they're hard to grasp. For example, $13 billion. How do average people understand a figure so immense?

One way to put this number in context is to view it from a different angle. For example, spending $1 million daily, it would take over 35 years before the total spending topped $13 billion.

Accordingly, $13 billion in stock sales in just one year is an unbelievably gigantic figure. So why is Jeff Bezos selling so much Amazon (NASDAQ: AMZN) stock, and should investors be worried? Let's dive into what's going on.

Image source: Getty Images.

What's happening with Bezos and Amazon stock?

Before delving into why Bezos is selling, we should first examine how we know about his sales. We know Bezos is selling so much Amazon because the Securities and Exchange Commission (SEC) requires that people defined as company insiders file forms disclosing transactions in a stock where they have beneficial ownership. Bezos, who owns more than 900 million shares of Amazon, or roughly 9% of Amazon's total outstanding shares, is listed as a beneficial owner in the company's filings.

In February, Bezos disclosed a series of Amazon stock sales totaling roughly 50 million shares, worth about $8.5 billion. Then, in July, another filing revealed that Amazon's founder and former CEO plans to sell a further 25 million shares worth roughly $5 billion, bringing his yearly total to over $13 billion.

Why is Bezos selling so much Amazon stock?

To put Bezos' stock sales into perspective, it's important to consider his net worth. While estimates of his wealth vary, it's likely around $200 billion, making him one of the richest people in the world. So, while his stock sales this year are significant, they still represent less than 10% of his overall net worth.

As for what Bezos is planning to do with all that cash, there's no way to really know. Some reports indicate Bezos may plan to purchase a professional football team. Others speculate that he will use the money to fund other businesses like his Blue Origin space company. He could simply be raising cash to diversify his investments or to pay personal expenses.

For investors, it's important to note that these stock sales are not a sudden or alarming development. On the contrary, they're pretty routine for Bezos.

Bezos' stock sales are not a recent trend. He sold $10.2 billion worth of Amazon shares in 2020 and $6.6 billion in 2021. Going back to 1997, Bezos sold or given away about $40 billion worth of Amazon stock.

What has evolved over the last 27 years is Bezos' ownership stake in Amazon. Back in 1997, following Amazon's initial public offering (IPO), Bezos controlled about 43% of the company's outstanding shares. As of this writing, he now controls 9%. It's also worth remembering that when Bezos and his former wife Mackenzie Scott divorced in 2019, she received 25% of their Amazon shares with a valuation of $38 billion.

Investors should remember that while large stock sales from company insiders can be eye-popping due to the huge dollar figures involved, they aren't always what they seem. The fact that Bezos' sales have grown so large over the years is a testament to the success of the business he started, which should instill confidence -- not fear -- for Amazon investors.

John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool's board of directors. Jake Lerch has positions in Amazon. The Motley Fool has positions in and recommends Amazon. The Motley Fool has a disclosure policy .