Amazon continues to invest in other companies

Amazon has become a more aggressive corporate investor with its investment portfolio hitting $1 billion worth of stock in public and private companies for the first time, as of the end of the second quarter.

Amazon disclosed that $593 million of the $1 billion investment is in public company equity and equity warrants that give it the right to purchase company stock in the future. The other $407 million worth of stock comes from privately held companies.

Last year Amazon reported $338 million of the investment value came from public company stock, with private company shares accounting for $285 million representing a 60 percent increase of $623 million a year ago and a 163 percent increase from the $380 million it disclosed in the same quarter of 2016.

This shows that the e-commerce giant is becoming more aggressive with external investments as the company becomes more profitable, cash rich and acquisitive.

It’s not uncommon for big companies to hold a large investment portfolio. Both Salesforce and Microsoft have made major investments in public and private companies that are now worth around $1 billion while Alphabet has disclosed it owns $8.8 billion worth of stock just from privately owned companies alone.

So, the size of Amazon’s investment portfolio is still small relative to the company’s overall value. Amazon is worth over $900 billion and holds $130 billion worth of assets, meaning the investment value is less than 1 percent of its total business. 

We predict that Amazon will continue to make major investments, so the company can keep tabs on the latest technology trends, business models, and rising entrepreneurs by investing in their companies and start ups.

By Jamie Barrie