No, Jeff Bezos Isn't Likely To Soon Become A Trillionaire

He's very much laughing to the bank in any case, either as a billionaire or a hypotethical trillionaire.


Reports have surfaced online of Amazon CEO Jeff Bezos, already known to be the world's wealthiest man, being on track to become a dollar trillionaire by the year 2026. Such reports are based on an analysis from Comparisun, a content provider for small and medium businesses. The analysis is based on the annual growth of some business titans' fortune over the past five years and predicting a similar growth rate for the next five years. Such method is, however, patchy, as "past performance is no guarantee of future results" as they say. Yes, a billionaire like Jeff Bezos is already unfathomably rich, currently worth more than $140 billion according to Forbes. That doesn't, however, mean he's likely on the path to trillionaire status.

In the past five years, Amazon, the company chaired by Jeff Bezos, has grown rapidly. In 2015, Amazon had revenues of $107 billion and in 2019 had revenues of about $280 billion. In the space of five years, the company more than doubled its already gargantuan revenue, thanks to a double-down on the growth of e-commerce globally. As of writing, Amazon, a publicly traded company, has a market cap hovering at $1.2 trillion, making it as the fourth largest publicly traded company globally, only beaten by Apple, Microsoft, and Saudi Aramco. Theoretically, for Jeff Bezos to become a trillionaire based on his Amazon shareholdings, Amazon would have to trade at about 7x its current market cap, that is, $8.4 trillion. If that happens, that would set a record never witnessed before in our modern business world. Amazon is of no doubt still growing, but it's kind of unlikely that it'll trade at a market value hovering at a whopping $8 trillion in six years time.

As of 2015 end, Amazon's market cap hovered at around $310 billion. As of 2019 end, that shot up to about $900 billion. It's only this year that Amazon hit a market cap of $1 trillion and it's very much easier to grow from a $310 billion market cap to a trillion. But from a trillion to about $8 trillion? that would be very difficult. In our current modern markets, the highest market capitalization a company has ever reached on the public markets is about $2 trillion, a record held by Saudi Aramco, an oil company that's owned and controlled by the government of Saudi Arabia. Saudi Aramco's 2018 revenue amounted to about $356 billion. It's also known to be the most profitable company ($111 billion in 2018) in the world. Amazon, on the other hand, had comparable revenues of $280 billion in 2019, but with a relatively smaller $11.6 billion in profit. At such profit levels, it's unlikely that Amazon would grow to a market cap hovering around $8 trillion.

Amazon as a company invests most of its profit back into its business, which helps it grow rapidly. In a case where the company decides to start keeping much of its profits, growth will likely stall and as a result lead to a decrease of its market cap. To maintain a hypothetical market cap of $8 trillion, Amazon would have to be insanely profitable or clinching annual revenues in the ballpark of let's say, $2 trillion and that seems somewhat unlikely.

This doesn't change the fact that Jeff Bezos is still an unfathomably wealthy man, in a country rife with economic inequality. Still, it's unlikely that'll he be a trillionaire by the year 2026.

Photo credit: DonkeyHotey, under Creative Commons license






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