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Stock sale follows plan announced days after he disclosed return to his Florida roots
By
Lyle Niedens
Full Bio
Lyle spent most of the past two decades in a variety of product, communication and financial writing roles with large asset managers and mutual fund distributors, mostly recently as vice president, director of product development with Waddell & Reed/Ivy Distributors Inc. Previously, he spent a decade in senior roles as an editor and reporter with business publications and financial news wires, including Dow Jones, BridgeNewsand Knight-Ridder Financial News. A graduate of the University of Kansas with an M.B.A. and a B.S. in journalism, he lives in Westwood, KS, a suburb of Kansas City, with his wife, Caryl, and their sons, Conley and Pierce.
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Published February 16, 2024
Key Takeaways
- Amazon founder Jeff Bezos three months ago disclosed his move back to Miami, where he attended high school and where his parents still live.
- The move helps Bezos avoid a state-level 7% capital gains tax that the state of Washington, where he's lived for years, instituted three years ago.
- Bezos' recent sale of Amazon shares valued at a substantial amount follows a prescribed stock sale plan allowable for wealthy corporate insiders.
In the past week, Jeff Bezos has unloaded more than 20 million shares of Amazon.com Inc. (AMZN), the company he founded 30 years ago in his Seattle garage.
He's following a prescribed plan available only to corporate insiders—and his recent cross-country move will reduce the transaction's tax bill.
Amazon's former chief executive officer (CEO) and the world's third-richest man, Bezos sold $6 billion worth of the company's stock between Feb. 7 and Feb. 14, according to filings with the Securities and Exchange Commission.
It marked the first time Bezos has sold Amazon shares since November 2021. Though obviously a substantial amount of money, the sale represented just 3.6% of Bezos' ownership in Amazon; he still owns more than 952 million shares valued at more than $160 billion.
Bezos sold his shares as part of a predetermined process for selling company stock. And his recent move to Miami will ease the tax burden of that process.
Playing the 10b5-1 Game
Bezos announced on Nov. 8, 2023, that he planned to sell up to 50 million shares of Amazon stock before Jan. 31, 2025. At the time, Amazon's stock traded near $142 per share; it since has risen to nearly $170.
His plan falls under the SEC's 10b5-1 rule, which outlines parameters that allow written agreements between corporate insiders and brokers for selling company stock.
Those agreements establish predetermined trading instructions that help the SEC track—and help companies and individuals defend against—insider trading accusations.
Typically, the SEC limits 10b5-1 plans to corporate insiders owning at least 10% of a company's shares, though companies may offer the plans to employees not traditionally considered insiders. At the time Bezos initiated his plan, he owned 10% of Amazon's outstanding shares.
Welcome (Back) to Miami
Six days before Bezos unveiled his 10b5-1 plan, he disclosed he was moving to Miami. He attended high school there in the early 1980s, and his parents still live in nearby Coral Gables. He reportedly bought two estates valued at a combined $147 million in Indian Creek Village, an island north of Miami Beach.
In addition to returning to his roots, the move also allows Bezos to avoid state taxes on his stock divestitures.
Florida and Washington are two of nine states with no state-level income taxes. But the state of Washington imposed a state-level 7% capital gains tax three years ago—a tax Florida doesn't have. That means Bezos saved an estimated $430 million in state taxes by changing coasts.
Other billionaires have flocked to Florida in recent years, including famed investors Carl Icahn and Josh Harris. Harris recently bought the National Football League's Washington Commanders franchise.
A 2019-20 analysis found it's not just billionaires: Households earning more than $200,000 annually moved to Florida at four times the rate of any other state.
Article Sources
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Securities and Exchange Commission. "Amazon.com Inc. Filings."
U.S. Securities and Exchange Commission. "Form 4 - Statement of Changes in Beneficial Ownership."
Seeking Alpha. "Jeff Bezos Sells Another $2B Chunk of Amazon Following Move to Miami."
Yahoo! Finance. "Amazon.com Inc. (AMZN)"
Charles Schwab. "Understanding Rule 10b5-1 Plans."
Miami New Times. "Bezos is Back! Amazon Founder Announces Move to Miami."
Fortune. "Wealthy Americans Are Flocking to Florida at Four Times the Rate of Any Other State."
CNBC. "Living in These 9 States Means You Don't Pay Income Tax, but Here's What To Watch Out For."
Fortune. "Jeff Bezos Sells Another $2 Billion of Amazon Shares, Bringing Weekly Cash Total to $6 Billion."
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