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Charlie O'Shea, Moody's VP & Senior Credit Officer, joined Yahoo Finance Live to talk Amazon earnings and his thoughts on Jeff Bezos' plans to step down as CEO in Q3.
SEANA SMITH: Charlie, the big news of the afternoon-- Jeff Bezos is becoming Executive Chair. Andy Jassy is now going-- he's the head of AWS. He's now going to take over as CEO. What are your thoughts?
CHARLIE O'SHEA: Seamless transition. Absolutely seamless transition. This has been-- one of the things that we've learned about Amazon is that there's an incredibly deep bench there. They've turned over CFOs without missing a beat. And as Brian just said, it's not like Jeff Bezos is going to go sailing off into the sunset here. He's going to be still very much involved in the overall strategy of the company. He's the largest shareholder, et cetera, et cetera. I mean, there's a whole lot of things that will keep him wedded to this company.
That said, he's bringing Andy over. Andy has done a terrific job with AWS. I mean, the numbers bear that out. AWS continues to be the profit engine of the company and supports the retail businesses, continuing investment. So I don't see anything here. This is just, you know, a succession plan that's been in the works for a while, in my view.
ADAM SHAPIRO: What do we know about the relationship between the two and the way they work? And is there any concern that Bezos still, with so much at stake, might micromanage?
CHARLIE O'SHEA: That's always a risk. I mean, we've all heard the horror stories about the CEO who moves upstairs and then stays looking over the shoulder of the new CEO. I don't think you'll see that here. I think this has been in the executive levels, at least from my perspective, it's a very collegial environment. And again, there's challenges, and they push themselves, and they push each other.
But I don't see that as being an issue here. I think what Jeff Bezos is going to do is, just let Andy run the show. And Andy will rely on Jeff for his counsel, which anybody would want to do. And it'll continue to run the way it's been running, which is pretty well.
SEANA SMITH: Charlie, what do you want to hear from Andy, assuming he's joining this earnings call? What do you want to hear in the next hour?
CHARLIE O'SHEA: I want to hear him basically say that there will be no change in strategy. And it's going to be much of the same. And I think that's what we will hear. You know, there's no reason to do anything here. I mean, the only thing-- and we've said this a lot over the years at Moody's, is that, you know, maybe they're light on brick and mortar. And when you look at 20 plus billion in shipping costs for Q4, there's your brick and mortar substitute.
But I don't think you're going to see anything. I think what you should hear on this earnings call is basically Andy's voice saying the words that everybody else has been saying over the last several years. Because there's really nothing to change here.
ADAM SHAPIRO: Charlie, as I'm looking off, you know, the shares are essentially flat in the post market. But when do we get a stock split? Is there a benefit to Amazon to do a stock split? I mean, we saw Apple do one last year. Why not Amazon? That's an expensive stock.
CHARLIE O'SHEA: Boy, you're asking me to tread in uncharted waters for a fixed-income analyst. You know, I see a $3,000 stock price. And I see that, you know, a round lot is really expensive. And that's about as far as I'll go. I think that, you know, the company has managed, you know, its financial policy with a lot of conservatism. And I think you'll continue to see that going forward. What that does to a potential stock split is anybody's guess. And I'm not going to hazard to do that right now.