Ray Dalio Sells AMZN Stock
Amazon.com, Inc. (NASDAQ:AMZN) just lost a big-name shareholder in Ray Dalio’s Bridgewater Associates. According to paperwork filed with the Securities and Exchange Commission, Bridgewater sold its entire position in AMZN stock. (Source: “Bridgewater Associates 13F Filing,” Securities & Exchange Commission, May 13, 2016.)
For those who may not be familiar with Ray Dalio, he is the founder of Bridgewater Associates. The firm is notable for being the largest hedge fund in the world, with more than $150 billion worth of assets under management.
Dalio made a killing off Amazon stock, which is probably why he cashed in. Shares of the Internet giant have skyrocketed by more than 128% since the start of 2015.
Bridgewater had started shedding its holdings last year, dropping 57% of its AMZN stake during the final quarter of 2015. It sold the remaining 8,206 shares by March 31.
The hedge fund is one of the most carefully watched in the business. It’s possible that Dalio’s exit will cause many investors to reconsider their position on Amazon. It could even turn some of them bearish on AMZN stock.
The company is coming off several quarters of huge earnings growth, but expectations have ballooned just as quickly. Amazon is still trading at 418X its earnings, meaning that investors are bullish on its bottom line.
A lot of the optimism is coming from the firm’s cloud computing arm, “Amazon Web Services.” AWS is dominating the market for infrastructure-as-a-service (IaaS), which tends to be a high-margin business.
Profits from that segment have more than made up for the slender margins in the retail business. However, critics argue that even with the growth of AWS, nothing can justify Amazon’s sky-high valuation.
Perhaps Dalio agrees with those critics or maybe he just likes walking away from the table while he’s in the black. All we know for certain is that Bridgewater sold AMZN stock at a huge profit, making millions for its shareholders.