- Daily Zen
What do you call a billionaire who has lost billions? A billionaire.
A high inflation translates to reduced purchasing power and rising cost of living. And no one is safe from its effects. As inflation climbs higher, Elon Musk, Jeff Bezos, and Bill Gates lost billions, as their companies’ market value plunged downward. The US is currently facing inflation that is at a four-decade high and it appears people will not receive much respite from it in the coming months.
While the richest people in the world have become less rich, the poor have been pushed to the brink of poverty. The Bloomberg Billionaires Index 2022 reported that Elon Musk, Jeff Bezos, and Bill Gates have collectively lost over $115 billion in the last five months.
Musk’s net worth dropped by $46.4 billion, Bezos’ by $53.2 billion, and Gates saw his fortune dip by $15.1 billion.
In 2021, Elon Musk was the highest paid CEO amongst Fortune 500 CEOs. As the chief executive of Tesla and SpaceX, he drew a total compensation of almost $23.5 billion. According to the Bloomberg Billionaires Index 2022, at the close of trading hours on May 27, Musk was worth $224 billion, Bezos $139 billion, and Gates $123 billion. While Musk and Bezos take first and second place respectively, Bernard Arnault, the chairman of French luxury conglomerate LVMH and the world’s third-richest person ahead of Gates, lost $44.7 billion since January to $133 billion.
Elon Musk lost billions as his net worth is mainly tied up in shares of his companies, SpaceX and Tesla. The recent crash in the stock market shaved off billions from his net worth.
The fifth richest person on the list is Warren Buffet. While Elon Musk, Jeff Bezos, and Bill Gates lost billions, the oracle of Omaha managed to add a cool $6.5 billion to his net worth, courtesy his timely and shrewd investments.
In April 2022, CNN revealed that the rising inflation has butchered household budgets leaving them with little in the way of discretionary spending. In the US, inflation is extremely high when it comes to food and gasoline.
This has an adverse effect on everyday life as lower-income households spend nearly 77% of their budget on necessities in comparison to the 31% spent on necessities by higher-income households.
High inflation and economic instability have also resulted in companies trimming their growth and revenue forecasts. A risk-averse Wall Street struggled to adjust to the changes, while the crash in tech stocks has left investors reeling. In May, Big tech lost over $1 trillion in value as the world’s biggest companies blamed rising inflation, higher costs, and supply chain issues for being unable to meet expectations.
Elon Musk lost billions as shares of Tesla fell by over 8%. It did not help matters that the Musk-Twitter deal which was supposed to net him billions in profit also saw a downward slide after Snap’s results were announced. As Snap cut its forecast, it impacted social media shares, resulting in the fall of Twitter and Musk suffering losses of almost $40 million on the deal. In case he decides to back out of the deal, he must pay a penalty of $1 billion. In January, Musk lost nearly one-tenth of his fortune, despite Tesla posting record profits.
As of May 10, Amazon’s shares were trading more than 40% below the company’s 52-week high of $3,773.08 that has not been replicated since February 2020. US Treasury Secretary Janet Yellen told lawmakers that she will not be surprised to see market turbulence extend through the summer. Meanwhile, after letting Satya Nadella take the helm, Gates has comparatively fewer shares of Microsoft in his kitty as he serves as chairman.
While big companies cut earnings forecasts, some are also reducing their workforce or putting hiring freezes in place until they get better clarity on how things will shape up.
Elon Musk, Jeff Bezos, and Bill Gates lost billions but retained their position on the billionaire’s list while many lost their life’s savings as an unstable economic climate cast dark clouds over the future.