Musk, Zuckerberg, Bezos, … the dark year for tech billionaires

Posted on Dec 31, 2022 at 11:03 am

Silicon Valley has lost its luster. The tech capital of the world was hit hard by the sector’s brutal crash on Wall Street. In one year, everything changed. The Nasdaq, the US index most associated with technology, lost more than 33%, one of the worst performances recorded by global markets this year.

Startups and internet giants alike had to tighten their belts. Long diluted by billions of dollars in technology, San Francisco is already feeling the repercussions of this immense loss of value. In the third quarter, property prices fell more than 10% in the American metropolis that is home to the headquarters of Twitter, Apple and even Google, according to the American Association of Realtors (NAR).

1,400 billion dollars erased

Tech billionaires, whose fortunes are closely tied to the health of Wall Street, have not been spared by this lean period. A handful of them, founders and heads of tech giants, have collectively lost more than $500 billion this year. That’s more than a third of the $1.4 trillion wiped out of the wealth of the world’s 500 richest people in 2022, according to a Bloomberg count.

Elon Musk alone has lost over $130 billion this year, because of his Twitter mishaps, from the announcement of his takeover to his muscle takeover. His controversial positions on the social network, proximity to far-right figures and simply the excess of time he devoted to his most recent acquisition and not to Tesla – the cornerstone of his heritage – caused the price of the latter to plummet. , despite the unfailing support of brokers.

The electric vehicle maker ended its worst year ever on Wall Street, falling 70% since January. As a result, Elon Musk is no longer the richest man on the planet. Despite these huge losses, however, he remains at the top of the rankings in the United States with 138 billion dollars. What inspires him an ironic tweet: “How to make a small fortune on social networks? Starting with a huge fortune.

Mark Zuckerberg hit hard

The other big losers of American technology are Jeff Bezos and Mark Zuckerberg. Their respective assets melted at $85 billion and $80 billion, reflecting Amazon’s 50% and Meta (formerly Facebook’s) 65% drop in the stock market. But all the big names in tech have suffered. Larry Page and Sergey Brin, the two co-founders of Alphabet (formerly Google), lost $45 billion each.

Bill Gates’ wealth fell by 28 billion and that of Steve Ballmer, who succeeded him for a while at the head of Microsoft, by 20 billion. On Apple’s side, only Steve Jobs’ widow, Lauren Powell Jobs, is wealthy enough to feature in the ranking. Her fortune also fell by 4 billion dollars, but it is mainly linked to the fall of Disney in the stock market. Indeed, she would no longer own any shares in Apple, according to Bloomberg, but she still owns a stake in the world’s entertainment leader.

The fleeting fortunes of cryptocurrencies

The blow is particularly hard for Mark Zuckerberg, relegated to 25th place in the world with a net worth of 45 billion dollars. However, he is doing better than Changpeng Zhao, known as “CZ”, founder and head of Binance, the leading cryptocurrency exchange platform. His wealth plummeted from $80 billion to $12 billion after the cryptocurrency crash and the implosion of rival FTX.

The industry as a whole had to adapt to a new reality, fortunes created with the emergence of cryptos were undone in record time. The repercussions are still being felt in the luxury watch market, an outward sign of wealth valued by the nouveau riche: in the secondary market, their price has dropped by more than 25% since the end of March, according to the specialized website Watchcharts.com.

Revenge of the “old economy”

Note, among the biggest drops of the year, the special place of Mackenzie Scott, ex-wife of Jeff Bezos. Since her divorce in 2020, she has focused on donating her fortune to charity as soon as possible. She claims to have donated more than $14 billion to a wide variety of organizations, from protecting children to promoting biodiversity, from aiding economic development to valuing the cultural heritage of disadvantaged minorities. Between her donations and Amazon’s steep drop in the stock market, her fortune has been reduced by $37 billion this year. With a net worth reduced to 19 billion dollars, she is only the 75th richest person in the United States.

Outside of technology, the wealth of the richest has held up much better, especially those built on the “old economy”. The oracle of Omaha, Warren Buffett, 92, became the third richest man in the United States this year after limiting his losses to less than $2 billion. Its highly diversified conglomerate, Berkshire Hathaway, suffered from rising rates in its real estate business, but that weakness was more than offset by the strength of its logistics and oil businesses. The strong return in black gold has mainly benefited the Koch family, one of the few big fortunes to have made it rich in the past year. It has numerous companies active in refining and transporting petroleum products and in mining.

Gautam Adani, big winner of the year

He is just behind Elon Musk in the ranking of the richest men in the world. The Indian Gautam Adani achieved the feat of increasing his fortune by almost 45 billion dollars during a year marked by the fall of the world’s financial markets, surpassing in the process luminaries such as Bill Gates or Warren Buffett thanks to his estimated fortune of 121 billion dollars. He is at the head of a conglomerate that goes from logistics to electricity production and construction. Two of its listed companies are members of the Mumbai Stock Exchange’s main index, the NSE Nifty 50, including its holding company Adani Enterprises, which has jumped 124% since the start of the year. His group contributed to the good performance of the Indian market this year, one of the few in the world to record a rise (+ 2.7% for the Nifty 50). Reflecting its economic dynamism, the Indian market as a whole has doubled London and Paris in terms of capitalization in 2022.

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