Jeff Bezos' mother made stunning fortune after riskily investing $245,573 into Amazon in 1995
Jeff Bezos’ mother made a stunning fortune after she riskily invested $245,573 into her son’s business back in 1995.
The late Jackie Bezos, along with her husband Mike, put nearly a quarter of a million dollars into Amazon during the early days of the company.
At the time, the tech giant was a risky startup, and Bezos’ parents put their savings into it to help him get it off the ground.
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Jackie passed away earlier this month but as of this year, her stake in her son’s business equates to 332 million shares, which is around $76.69 billion.
So it turns out that risky move to help out her child’s business venture came with very lucrative returns.
In fact, Jackie ended up getting a whopping 31,227,014% return on her investment into Amazon.
The evolution of Amazon
Amazon first started out in 1994 as an online bookstore before it expanded to music and videos in 1998.
During the 00s, the firm continued to expand its stock list, growing into the world’s largest online retailer, surpassing even Walmart.
Amazon’s controversy with Toys ‘R’ Us
Part of Amazon’s rise coincided with the decline of once-beloved toy store Toys ‘R’ Us, which closed its doors in 2018.
The company became involved with Amazon after it suffered a website crash during Christmas 1999, meaning that customers didn’t receive their orders in time.
This led to a $350,000 fine by the Federal Trade Commission (FTC) and as a result, the firm found themselves agreeing to a deal with Amazon, which was growing in popularity at the time.
Toys ‘R’ Us agreed to pay Amazon $50 million a year for 10 years, plus a percentage of sales, in order to gain exclusivity on the e-commerce site for toys and baby products.
However, things didn’t stay rosy as just three years later in 2003, other toy merchants started to appear on Amazon, meaning companies like Mattel and Hasbro are suddenly able to sell their products directly.
At the time, Jeff Bezos met with executives and insisted that they needed to stock a wider variety of products or competitors would be allowed to sell their items on Amazon.
In response, Toys ‘R’ Us sued Amazon for breaching their contract.
And while Amazon counter-sued for a whopping $750 million, claiming that the toy firm wasn’t stocking popular toys, Toys ‘R’ Us won its case.
Amazon was forced to pay up a settlement of $51 million but while Toys ‘R’ Us set up its own site and canceled its partnership with Amazon - it was too late.
The damage had already been done and the firm struggled to recover.
By 2017, the company had over $5 billion in debt and filed for bankruptcy, with all of its stores being closed by the following year.