Saturday, May 28

Why Musk or Bezos don’t blink when they lose more than 20,000 million dollars: the fortunes of the ultra-rich come and go (mostly)

Red numbers plague everywhere. Stock markets are going through a rough patch these days — cryptocurrencies too — and companies are losing billions in market capitalization, but who also lose fortunes are the billionaires, those that fascinate us in particular although we detest millionaires in general.

They do, yes, in an ephemeral way. Jeff Bezos lost $20 billionrice helps to understand those dizzying fortunes – during this black weekend for the price of Amazon, and other technology leaders suffered huge losses. None of them seem overly concerned, and rightfully so. Those fortunes come and go with amazing speed, and one thing is certain in almost all cases: in the long run, they all win (a lot). They all end up even richer.

When wealth is measured in shares

Bezos was not alone in those multi-million dollar losses of his personal fortunes. The same thing happened in the case of Mark Zuckerberg, who lost 10.4 billion dollars for the fall of Amazon, or Changpeng Zhao, who saw how the fall of Binance caused him losses of 17.7 billion dollars.

The 10 most important technology companies in the world, grouped in the FANG+ index, leave growth behind indices such as the NASDAQ100 or the much more modest S&P500.

Elon Musk actually lost more than all of them: his fortune fell 9% this past week, and his wealth decreased by $25.1 billion. Do you know why neither he nor any of his fellow billionaires have probably batted an eye at the news?

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Because it is more than likely that they will recover from those losses very soon. it’s an old story. Elon Musk lost $27 billion in March 2021. Bezos lost 13.5 billion in July of that year after stocks tumbled on somewhat disappointing quarterly results.

What the hell: Mark Zuckerberg lost 10,000 million in March 2018, after the Cambridge Analytica scandal, and it did not matter: Facebook resurfaced with force. The actions then They were about $170. Today they exceed 300, and that they are in theoretically low hours.

That is the key to how these billionaires are not affected by these movements: their fortunes are based on their shares in the companies they created or invested in. In the case of technological those stocks have skyrocketed in recent years, and despite major market shocks—such as the COVID-19 pandemic and the March 2020 lockdown—the weight of those giants is growing.

We told about it almost two years ago now: the S&P500 index, which brings together the 500 most important companies in the United States, it fell almost 34% with the crisis caused by the pandemic and stood at 2,584 points. In just two months it rose 31% and almost recovered its maximum pre-pandemic level. Do you know how much it is now? At 4,397 points, and again we are in low hours in the international stock markets.

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That peak at the beginning of 2020 marks the crisis due to the pandemic. The FANG+ index in particular (and tech companies in general) have done quite well since then.

The FANG+ Index that groups to the big technology companies (Facebook, Apple, Amazon, Netflix, Google, Microsoft, Alibaba, Baidu, NVIDIA and Tesla) goes beyond. It plummeted with the pandemic (2,656 points) and right now, at a pretty bad time compared to the most recent weeks, it’s at almost 6,600 points.

All this makes it quite clear that these personal fortunes so closely linked to the stock market suffer the same ups and downs, but at least in the case of the big technology companies it is clear that losing $25 billion a day doesn’t usually matter when a few months the shares have risen again in a remarkable way and make that data almost anecdotal.