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Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by prewett on Friday November 03, 2017 @10:14PM (#15623471)
My initial question was how did he sell $1B and not affect the share price substantially. And sure enough, the share price did drop a bit. But average trading volume is about 2 billion shares, which is about $2B. It's pretty crazy that the market has so much liquidity that $2B of AMZN changes hands every day, and that it could soak up a $1B sale and barely change the price.
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by thisisit on Saturday November 04, 2017 @03:48AM (#15624181)
Because of the order type.

Market Orders soak up all the liquidity as they need to be executed at the best price available. So, if the price is at $10 and I dump a huge amount of shares, it will go through the bids..$10, $9.9, $9.8...you get the idea.

Limit Orders kind of provide liquidity. It doesn't execute unless a certain condition is met. So I can dump a large sell at $10, it won't change the price. Anyone in the market can bid into $10 and buy shares if they want.

So, trading volume doesn't matter, order type matters. If Bezos had dumped his shares in open market it would cause the price to change dramatically. People will take it as a sign and jump out like rats fleeing a sinking ship.

Most of these trades are pre-planned and are limit orders.

The data has not been updated for the November sells you can see all the Amazon insider trades here (including the March selling noted in the article): http://www.nasdaq.com/symbol/amzn/insider-trades

Most are automatic sell and are pre planned. Disposition are trades which are off market transaction, selling or buying, directly with the company.

Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by candiodari on Saturday November 04, 2017 @05:04AM (#15624304)
I think you'll find limit orders limit the price while they're executing. Say I place a $10 million MSFT limit buy order at $80, that means that until my $10 million is used up (the order is "filled") the price cannot drop below $80.

Conversely if I place a $1B sell order for $1100 (ought to be close to what happened here) the price cannot rise above $1100 until that amount of money has been extracted out of the market.

Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by alok-g on Saturday November 04, 2017 @07:03AM (#15624534)
>> I place a $1B sell order for $1100 the price cannot rise above $1100

That should not prevent the price from falling with such an order.

Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by zxcmx on Saturday November 04, 2017 @05:28AM (#15624343)
In that case, there was a "bezos wall" this week :)
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by mabbo on Friday November 03, 2017 @10:23PM (#15623496)
Because the market knows ahead of time he's going to do this- it's pre-announced. Any shift caused by it would happen weeks or months ahead of time, slowly, quietly.

And so it's no big deal the day it actually happens.

Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by olympus on Friday November 03, 2017 @10:43PM (#15623528)
Minor correction: Google finance shows average volume at 3.7M shares, which at $1,100 per share is about $4B daily. Selling a billion dollars is still a significant chunk, so your point stands.
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by Mikeb85 on Friday November 03, 2017 @11:56PM (#15623688)
Over 3 days of selling (according to the article), that's only an average of about 8% of daily volume.
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by joering2 on Saturday November 04, 2017 @12:48AM (#15623846)
I witnessed exchange of $300MM of stock for cash in late 90s at my job. You are correct that noone sels $1B of stock and doesn't make dent in trading value.

So to do that right, you get on the phone with broker who agrees to buy such quantity. You put order SELL at $5 and 1,000,000 shares ONLY, which means noone can buy just 10 shares: you take 1MM or none. Once your call reach the market, within seconds the other party puts a BUY call at 1,000,000 shares. 10 seconds later the whole transaction is done. It doesn't affect market at all, because the price fluctuates based on supply and demand. In our scenario X of supply met X of demand immediately, so the market didn't tick. Of course such large volume might be some sort of a signal (buy or sell, depends on party that looks at it), but will not trigger serious movement of stock, immediately.

Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by jpatokal on Saturday November 04, 2017 @01:24AM (#15623925)
That may have been the case in the 1990s, but isn't 10 seconds an eternity in today's HFT world? You'd need to arrange the sale off the exchange.
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by joering2 on Saturday November 04, 2017 @11:41AM (#15625509)
No you wouldn't. Its not like hundreds of big fish is waiting at their keyboard trying to push "BUY 10MM stock" at the right spot, because it might show up at the stock exchange. These "deals" are secret as of when they take place. As I said, you get on the phone, 3 seconds one party post "BUY 10MM", second party post "SELL 10MM". Done and done.
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by sudhirj on Saturday November 04, 2017 @12:15AM (#15623745)
To prevent any accusations of insider trading, these sales tend to be announced months in advance and scheduled, so any movements on the sale day are more likely to be naieve investors reacting.
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by jliptzin on Saturday November 04, 2017 @12:50AM (#15623855)
Yea but they can cancel those trades at any time. They can set up a weekly sale of a huge chunk of stock, cancel it every week while the company is doing fine, then right before a terrible quarter hits, allow the sale to go through. This does not stop insider trading.
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by lovich on Saturday November 04, 2017 @02:32AM (#15624057)
Is it that simple? I thought the SEC didn't fuck around just because people found a loophole, like with them recently classifying ICOs as securities
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by xyzzy_plugh on Saturday November 04, 2017 @03:18AM (#15624120)
The general advice I've heard is not to do this sort of thing. It's a loophole and when the SEC inevitably catches you, you are boned.

If it's obviously a loophole to you and me, then what do you imagine the SEC think?

Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by eighthnate on Saturday November 04, 2017 @03:17PM (#15626437)
Because it was probably traded book to book or via the back-end pools. Most likely bezos' broker called other brokers/hedge funds/etc to gauge interest and one or few of them agreed to take on the position.

This happens all the time when the big boys want to open/close/rebalance large positions within a short time frame.

Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by aqsheehy on Friday November 03, 2017 @10:38PM (#15623521)
Markets are efficient
Re:Amazon CEO Jeff Bezos sold more than $1B worth of stock t... by justinjlynn on Saturday November 04, 2017 @03:50AM (#15624186)
In the large? Yes, generally and generically speaking they are excellent at pricing in the very short term. On the small they have all sorts of failure modes and perversions - there is no such thing as "the market" there are, however, market conditions in any given area which may or may not follow certain patterns of activity.