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Amazon shareholders face two big risks from Jeff Bezos’ divorce

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For the last 25 years, Jeff Bezos has been the steady hand on the tiller for Amazon, guiding the company through both rough patches and calm seas to ever-richer ports of call.

Now his personal life threatens to rock the company’s boat.

Bezos announced Wednesday that he and his wife, MacKenzie, are getting a divorce. Investors will likely be watching closely to see how the dissolution of his marriage affects Bezos’ running of the company and his stock holdings in it, said Mark Harrison, an advisor with consultancy Marcum, who has served as an expert witness in numerous financial disputes.

“Investors care mostly about uncertainty,” he said. He continued: “The market will look for signs of emotional upheaval between the two of them.”

For now, investors seem to be taking the news of the divorce in stride. Amazon’s shares closed Thursday down well less than 1%, and the company retained its title as the world’s most valuable corporation. But things could change if the proceedings become protracted or start to get ugly, Harrison said.

That may already be starting. In a statement on Twitter announcing their plans to divorce, Bezos and his wife portrayed it as a friendly parting. But subsequent reports in the National Enquirer and the New York Post that Bezos was carrying on an affair before he and his wife officially separated threatened to sully that narrative.

The Bezoses’ divorce has two big risks for shareholders

The risk of the Bezoses’ breakup to Amazon and its shareholders is two-fold.

As the company’s founder and sole CEO since its launch, Bezos is widely seen as the driving force behind the tech giant, which dominates the e-commerce market, has become the leading player in the cloud-computing industry, and has become the number-3 player in digital advertising behind Google and Facebook. Many investors likely consider him to be critical to the company’s continued success, and may rightly worry that Amazon’s business could suffer if Bezos is distracted by the divorce.

Discussing the potential danger, Harrison paraphrased hedge fund manager Paul Tudor Jones’ feelings on the topic.

Since the Bezoses announced their divorce, the National Enquirer has reported Bezos has been carrying on an affair with former television anchor Lauren Sanchez.
Stefanie Keenan/WireImage

A person going through a divorce is “worthless to him, because they’re completely unfocused,” Harrison said.

But the other danger comes from Bezos’ vast holdings of Amazon stock. He owns about 79 million shares, or about 16% of the company. That stake, worth about $131 billion, represents about 95% of his total wealth.

Washington state, where Amazon is headquartered and the Bezoses have long made their primary residence, will likely be where they end up filing for divorce. The state’s community property laws don’t mandate that MacKenzie will get a 50% cut of his Amazon stake in the divorce, but they likely will result in her getting ownership of a sizable portion of it, potentially up to half, legal experts said.

Read more:Jeff Bezos’ divorce could soon make MacKenzie Bezos one of Amazon’s biggest shareholders

The concern for investors is what kind of control she will have over the shares she gets, how they get transferred to her, and what she does with them.

“Investors are going to be spooked if any member of the family starts selling significant amounts of stock,” Harrison said.

The divorce won’t cause a change of control at Amazon

Amazon representatives did not respond to emails seeking comment about the Bezoses’ divorce. Representatives for Vanguard and BlackRock, the two largest Amazon shareholders after Bezos, declined to comment on the divorce proceedings or their impact on shareholders.

Unlike Facebook CEO Mark Zuckerberg, Bezos does not have a controlling stake in his company.
REUTERS/Charles Platiau/File Photo

One thing that’s not a concern in the Bezos divorce is how it will affect control of the company. Other tech CEOs, including Facebook’s Mark Zuckerberg and Alphabet’s Larry Page, hold shares that give them or a small cohort of insiders control over their companies because they come with super-sized voting rights.

But Bezos holds the same kind of shares as everyday Amazon investors. Although he’s Amazon’s largest shareholder, its CEO, and its chairman, he doesn’t have unchecked sway over it. So, no matter how many shares MacKenzie ends up with, or how her holdings are structured, it won’t affect the balance of power at the company.

“I am very happy that Amazon has a one share, one vote structure,” said Rosemary Lally, an editor at the Council of Institutional Investors, which advocates for stronger corporate governance and shareholder rights, in an email. “If McKenzie [sic] Bezos does become a major shareholder and tries to do something that other Amazon shareholders oppose, they can [hold] her accountable.”

Legal experts expect them to keep shareholders in mind

To be sure, Harrison, who has worked on divorce cases among other affluent couples, and other legal experts expect the Bezoses to be very aware of investors’ potential worries and to do whatever they can to alleviate them. Because so much of their wealth is tied up in Amazon’s stock, it’s in the best interests of both of them to do so.

“I think you’re going to find that both parties here want to get the investor world comfortable that nothing’s going on,” Harrison said.

Indeed, he and some other legal experts expect the divorce process to go relatively smoothly, not just because it’s in both sides’ interest, but because the amount of wealth they have is so immense. In some divorces, even among wealthy individuals, one side or the other stands to be materially hurt by the division of their assets, particularly if most of their wealth is in their homes, said Ira Garr, a family-law attorney in New York who represented Rupert Murdoch and Ivana Trump in their respective divorce cases. Such cases can be particularly rancorous, just because of that.

But that’s just not applicable with the Bezoses.

“When you’re talking about numbers this vast, no matter what you get, you’re set for the rest of your life,” Garr said. In that respect, he continued, “cases like that are easier to settle.”

The two will likely structure their divorce settlement so that they don’t have to sell shares all at once and depress the market, legal experts said. Instead, they’re likely to put provisions in place that limit MacKenzie’s ability to sell stock — and perhaps even allow Jeff Bezos to retain control over the voting rights of her shares, Harrison said.

Indeed, Brian Weiser, a financial analyst who covers Amazon for Pivotal Research Group, doesn’t think investors have anything to worry about when it concerns Bezos’ divorce.

“I’m not aware of any reason why anyone should assume there’s any meaningful risk of any meaningful problem,” he said.

But emotions can sometimes get in the way

Much of this assumes that the Bezoses will act rationally and will be able to set their emotions aside. But many divorces don’t work out that way. And if Bezos or MacKenzie starts acting out of emotion rather than rationality, all bets may be off in terms of the ease of the divorce, his state of mind in running Amazon, and what happens to his shares.

“When [a divorce] gets salacious and a little crazy … all kinds of bad things can happen,” Harrison said.

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The 3 Best Canadian Tech Stocks I Would Buy With $3,000 for 2021

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The majority of the Canadian tech stocks went through the roof in 2020 and delivered outsized returns. However, tech stocks witnessed sharp selling in the past 10 days, reflecting valuation concerns and expected normalization in demand. 

As these high-growth tech stocks shed some of their gains, I believe it’s time to accumulate them at current price levels to outperform the broader markets by a significant margin in 2021. Let’s dive into three tech stocks that have witnessed a pullback and are looking attractive bets. 

Lightspeed POS

Lightspeed POS (TSX:LSPD)(NYSE:LSPD) stock witnessed strong selling and is down about 33% in the last 10 days. I believe the selloff in Lightspeed presents an excellent opportunity for investors to invest in a high-growth and fundamentally strong company. 

Lightspeed witnessed an acceleration in demand for its digital products and services amid the pandemic. However, with the easing of lockdown measures and economic reopening, the demand for its products and services could normalize. Further, it faces tough year-over-year comparisons. 

Despite the normalization in demand, I believe the ongoing shift toward the omnichannel payment platform could continue to drive Lightspeed’s revenues and customer base. Besides, its accretive acquisitions, growing scale, and geographic expansion are likely to accelerate its growth and support the uptrend in its stock. Lightspeed stock is also expected to benefit from its growing average revenue per user, innovation, and up-selling initiatives.     

Shopify 

Like Lightspeed, Shopify (TSX:SHOP)(NYSE:SHOP) stock has also witnessed increased selling and has corrected by about 22% in the past 10 days. Notably, during the most recent quarter, Shopify said that it expects the vaccination and reopening of the economy to drive some of the consumer spending back to offline retail and services. Further, Shopify expects the pace of shift toward the e-commerce platform to return to the normal levels in 2021, which accelerated in 2020.

Despite the normalization in the pace of growth, a strong secular shift towards online commerce could continue to bring ample growth opportunities for Shopify, and the recent correction in its stock can be seen as a good buying opportunity. 

Shopify’s initiatives to ramp up its fulfillment network, international expansion and growing adoption of its payment platform are likely to drive strong growth in revenues and GMVs. Moreover, its strong new sales and marketing channels bode well for future growth. I remain upbeat on Shopify’s growth prospects and expect the company to continue to multiply investors’ wealth with each passing year. 

Docebo 

Docebo (TSX:DCBO)(NASDAQ:DCBO) stock is down about 21% in the last 10 days despite sustained momentum in its base business. The enterprise learning platform provider’s key performance metrics remain strong, implying that investors should capitalize on its low stock price and start accumulating its stock at the current levels. 

Docebo’s annual recurring revenue or ARR (a measure of future revenues) continues to grow at a brisk pace. Its ARR is expected to mark 55-57% growth in Q4. Meanwhile, its top line could increase by 48-52% during the same period. The company’s average contract value is growing at a healthy rate and is likely to increase by 22-24% during Q4. 

With the continued expansion of its customer base, geographical expansion, innovation, and opportunistic acquisitions, Docebo could deliver strong returns in 2021 and beyond.

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Manitoba to invest $6.5 million in new systems

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WINNIPEG – The province of Manitoba is investing $6.5 million over three years to replace technical systems used in healthcare facilities, including replacing current voice dictation and transcription services with more modern systems and upgrading the Provincial Health Contact Centre (PHCC)’s triage, call-recording and telephone systems, Health and Seniors Care Minister Heather Stefanson (pictured) announced.

“Our government is investing in the proper maintenance of information and communications technology to ensure digital health information can be safely stored and shared as needed,” said Stefanson. “These systems will ensure healthcare facilities can continue to provide high-quality services and allow Manitobans to get faster access to healthcare resources and information.”

Dictation, transcription and voice-recognition services are used by healthcare providers to write reports. There are currently approximately 80 healthcare sites across Manitoba using some combination of dictation, transcription and voice-recognition services. Many of these systems are nearing the end of their usable lifespans.

“Across our health system, radiologists and nuclear medicine physicians use voice-dictation services to help create diagnostic reports when reading imaging studies like ultrasound, nuclear medicine studies, X-rays, angiography, MRI and CT scans,” said Dr. Marco Essig, provincial specialty lead, diagnostic imaging, Shared Health. “Enhanced dictation and voice-recognition services will enable us to work more efficiently and provide healthcare providers with quicker access to these reports that support the diagnoses and treatment of Manitobans every day.”

The project will replace telephone-based dictation and transcription with voice-recognition functions, upgrade voice-recognition services for diagnostic imaging and enhance voice-recognition tools for mobile devices.

“Investing in more modern voice-transcription services will help our health-care workers do the administrative part of their jobs more quickly and effectively so they can get back to the most important part of their work – providing top-level healthcare and protecting Manitobans,” said Stefanson. “The transition to the new system will be made seamlessly so that services disruptions, which can lead to patient care safety risks, will not occur.”

The new systems will be compatible with other existing systems, will decrease turnaround times to improve patient care and will be standardized across the province to reduce ongoing costs and allow regional facilities to share resources as needed, Stefanson added.

The PHCC is a one-stop shop for incoming and outgoing citizen contact and supports programs such as Health Links–Info Santé, TeleCARE TeleSOINS and After-Hours Physician Access, as well as after-hours support services to public health, medical officers of health, home care and Manitoba Families.

The current vendor that supplies communications support to the PHCC is no longer providing service, making it an opportune time to invest in an upgraded system that will provide better service to Manitobans, the minister said, adding the project will provide the required systems and network infrastructure to continue providing essential services now and for the near future.

“The PHCC makes more than 650,000 customer service calls to Manitobans per year to a broad spectrum of clients with varied health issues. This reduces the need for people to visit a physician, urgent care or emergency departments,” said Stefanson. “The upgrade will also allow Manitobans in many communities to continue accessing the support they need from their home or local health centre, reducing the need for unnecessary travel.”

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Telus and UHN deliver services to the marginalized

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Telus’s Health for Good program has launched the latest of its specially equipped vans to provide medical services to the homeless and underserved, this time to the population of Toronto’s west end. The project relies not only on the hardware and software – the vans and technology – but on the care delivered by trained and socially sensitive medical professionals.

For the Toronto project, those professionals are working at the University Health Network’s Social Medicine program and the Parkdale Queen West Community Health Centre. The city’s Parkdale community, in the west end, has a high concentration of homeless and marginalized people.

First launched in 2014, Telus’s Health for Good program has delivered mobile clinics to 13 Canadian cities, from Victoria to Halifax. Originally designed to deliver primary care, the program pivoted to meet the needs of patients in the COVID-19 pandemic, said Nimtaz Kanji, Calgary-based director of Telus Social Purpose Programs.

Angela Robertson of the Parkdale Queen West Community Health Centre (CHC) asserted that marginalized people are particularly susceptible to the spread of COVID-19, as they don’t have access to the basic precautions that prevent its spread.

The clinic is located near a Pizza Pizza franchise; homeless people shelter under its overhang on the weekends, she said. Some have encampments under nearby bridges.

“The public health guidelines and requirements call for things that individuals who are homeless don’t have,” Robertson said. “If the response calls for isolation, that suggests people have places to isolate in.”

And in the shelter system, pre-COVID, the environment was very congregate, with many people in the same physical space, said Robertson. Some homeless persons, in order to keep themselves safe, have created encampments, and the city has opened up some hotel rooms across the city to create spaces for physical distancing.

Even proper hand-washing and hygiene becomes a challenge for the homeless.

“COVID calls for individuals to practice constant hand-washing. Oftentimes, individuals who are homeless use public washroom facilities that may be in restaurants or coffee shops, and many of those spaces are now closed. So there are limitations to accessing those facilities. It’s not like they’re in a community where there are public hand-washing facilities for people who are homeless.”

The mobile health clinic allows the CHC to take “pop-up testing” into communities where there is high positivity and where additional COVID testing is needed. The CHC can take testing into congregate sites and congregate housing to provide more testing, Robertson said.

“The other piece that we will use the van to do is, when the vaccine supply gets back online, and when the health system gets to doing community vaccinations … we hope that we can be part of that effort.”

COVID has contributed to a spike in cases of Toronto’s other pandemic: opioid overdoses. Some community members are reluctant to seek care because of the stigma attached to substance abuse; and COVID has a one-two punch for users.

The first rule of substance abuse is, don’t use alone; always be with someone who can respond to a potential overdose, ideally someone who can administer Nalaxone to reverse the effects of the overdose, Robertson said. “It’s substance abuse 101,” and the need for social distancing makes this impossible.

Secondly, COVID has affected the supply chain of street drugs. As a result, they’re being mixed increasingly with “toxic” impurities like Fentanyl that can be deadly.

The van itself is a Mercedes Sprinter, modified by architectural firm éKM architecture et aménagement and builder Zone Technologie, both based in Montréal. According to Car and Driver magazine, the Sprinter line – with 21 cargo models and 10 passenger versions – is “considered by many to be the king of cargo and passenger vans.”

Kanji said the platform was chosen for its reputation for reliability and robustness.

While the configuration is customized for each mobile clinic, it generally consists of two sections: A practitioner’s workstation and a more spacious and private examination room, so patients can receive treatment with privacy and dignity, Kanji said. The Parkdale clinic is 92 square feet.

“While the layouts vary across regions, they typically include an examination table and health practitioners’ workstation, including equipment necessary to provide primary healthcare,” the Telus vice-president of provider solutions wrote in an e-mail interview. The Parkdale Queen West mobile clinic is designed for primary medical services, including wound care, mobile COVID-19 testing and vaccination efforts, harm reduction services, mental healthcare and counseling.

The clinic equipped with an electronic medical record (EMR) from TELUS Health and TELUS LTE Wi-Fi network technology.

Practitioners will be able to collect and store patient data, examine a patient’s results over time, and provide better continuity of care to those marginalized citizens who often would have had undocumented medical histories.

The EMR system is Telus Health’s PS Suite (formerly Practice Solutions). It is an easy-to-use, customizable solution for general and specialty practices that captures, organizes, and displays patient information in a user-friendly way. The solution allows for the electronic management of patient charts and scheduling, receipt of labs and hospital reports directly into the EMR, and personalization of workflows with customizable templates, toolbars, and encounter assistants.

But like others tested for COVID, it’s a 24-48 hour wait for results. Pop-up or not, how does the mobile team get results to patients who have no fixed address?

The CHC set up a centre for testing in a tent at the Waterfront Community Centre. Swabs are sent to the lab. “We are responsible for connecting back with community members and their results,” Robertson said.

“This is the value of having Parkdale Queen West being in front of the testing, because many of the community members who are homeless we know through our other services, and there is some trust in folks either coming to us to make arrangements to collect their results, or we know where they are.”

This is a key element of the program, said Kanji – leveraging community trust. In Vancouver downtown east side, for example, where there is a high concentration of marginalized members of the indigenous community, nurse practitioners are accompanied by native elders in a partnership with the Kilala Lelum Health Centre.

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