Amazon Stock: Will It Be Hurt By Bezos-Enquirer Feud? – Investor's Business Daily

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The decision by Amazon (AMZN) chief Jeff Bezos to preempt the National Enquirer and lay bare embarrassing details of his personal life may have been the easier task. Now the world’s wealthiest man needs to convince investors that locking horns with a powerful American media organization won’t hurt Amazon stock.


Bezos, Amazon’s chief executive and single largest shareholder, stunned the industry Thursday night when he accused the Enquirer of trying to blackmail him. He published tense exchanges with the magazine that included prurient details of his relationship with former TV anchor Lauren Sanchez.

The saga now threatens to snowball, exerting even more pressure on Bezos. In addition to Amazon, the billionaire oversees a space exploration company and the Washington Post, which has been critical of U.S. President Donald Trump. Amazon stock was off 2% near 1,583 in recent action on the stock market today.

The Enquirer, owned by privately held American Media, recently published an expose on Bezos’ relationship with Sanchez. So Bezos hired investigator Gavin de Becker to find out if the story was politically motivated, since Enquirer publisher David Pecker is a confidant of Trump.

Bezos also made efforts in Thursday’s write-up to cement another narrative: He’s focused.

“I asked him (de Becker) to prioritize protecting my time since I have other things I prefer to work on and to proceed with whatever budget he needed to pursue the facts in this matter,” Bezos wrote in the post.

The Possible Threat To Amazon Stock

Bezos’ move to scoop the Enquirer on its own story effectively neutralized any leverage the magazine had over him. But the longer the fight plays out in public, the bigger the threat that Bezos is perceived as distracted, said David Larcker, professor at the Stanford Graduate School of Business. Larcker has researched the impact of CEO controversies on companies.

“What you don’t want to have happen is all of this lingering stuff that bleeds itself out and it just takes on a life of its own,” said Larcker, who doesn’t anticipate the controversy hurting Amazon sales at this point. “Where you worry about it is what’s happening in the executive suite. What time is it taking? Is it adding stress?”

The first whiff of controversy came Jan. 9 when Bezos posted a statement on Twitter, signed by him and his wife of 25 years, MacKenzie, announcing plans to divorce. Hours later, the first Enquirer story on his extramarital relationship with Sanchez posted online.

Bezos on Thursday said the magazine later threatened to release more details — including selfies with partial nudity. The magazine wanted him to stop his ongoing investigation into the publication’s motives, Bezos said. Bezos accused the Enquirer and Pecker of extortion in a bid to end that probe.

The Amazon chief also suggested the Enquirer’s moves may be linked to the killing of Saudi journalist Jamal Khashoggi. Khashoggi was a Post columnist.

Bezos Stays Focused, Company Says

Bezos owns about 16% of Amazon stock. He remains “focused and engaged in all aspects of Amazon,” a company spokesperson said. The company, however, hasn’t addressed whether he will accelerate his periodic sales of Amazon shares. It also hasn’t said whether the divorce will affect his holdings.

For now, investors have shrugged off news of his personal life as unimportant to the value of the company. Amazon posted revenue of $233 billion last year and a record-breaking holiday season.

Bezos has twice jumped in front of embarrassing news. Now the challenge is in maintaining the perception he can focus on his company’s growth.

“Bezos is that extraordinary, and Amazon is that extraordinary, that he can bring down a bully,” said Davia Temin, founder of the New York based crisis-consultant Temin and Co.

“He’s got the courage, and the position as the richest man in the United States,” Temin said. “I think his courage in standing up to the extortion is going to outweigh the details behind the extortion.”


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