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Billionaires lose $1.4 trillion in disastrous semester

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It’s a sharp turn from the previous two years, when the fortunes of the ultra-rich soared on the back of unprecedented stimulus measures put in place by governments and central banks to deal with the COVID-19 pandemic, driving up the value of everything from tech companies to cryptocurrencies.

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Now that policymakers are raising interest rates to combat soaring inflation, some of the most expensive stocks — and the billionaires who own them — are rapidly losing ground. Tesla Inc. had its worst quarter ever in the three months through June, while Amazon.com Inc. suffered its biggest drop since the dotcom bubble burst.

Although the losses accrue to the world’s richest people, they represent only modest progress toward reducing wealth inequality.

Tesla co-founder Musk remains the world’s richest at $208.5 billion, while Amazon owner Bezos ranks second with a net worth of $129.6 billion, according to the Billionaires Index. from Bloomberg.

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Bernard Arnault, France’s richest person, is third with $128.7 billion, followed by Bill Gates with $114.8 billion, according to the Bloomberg index. They are the only four people whose fortunes exceed $100 billion. At the beginning of the year, 10 people around the world exceeded that amount, including Zuckerberg, who is now 17th on the list with $60 billion.

contrary impulse

Still, the billionaire class has amassed so much wealth in recent years that not only can the vast majority endure the worst first half since 1970 for the S&P 500 index, but they are probably looking for bargains, said Thorne Perkin, president of Papamarkou. Wellner Asset Management.

“Often, their mentality is a bit more contrary”Perkin noted. “Many of our clients look for opportunities when there are problems in the streets”.

That was what happened in the first half of the year in some of the most distressed corners of global financial markets.

Vladimir Potanin, Russia’s richest man with a fortune of US$35.2 billion, acquired the entire position of Société Générale SA in Rosbank PJSC earlier this year, amid the fallout from Russia’s invasion of Ukraine. of Vladimir Putin. He also bought Russian tycoon Oleg Tinkov’s stake in a digital bank for a fraction of what he was worth.

Sam Bankman-Fried, CEO of cryptocurrency exchange FTX, bought a 7.6% stake in Robinhood Markets Inc. in early May, after the brokerage app’s share price fell 77% from its expected high. initial public offering last July. The 30-year-old billionaire has also been a lender of last resort for some troubled crypto companies.

The most high-profile purchase of all was that of Musk, who struck a $44 billion deal to buy Twitter Inc. He offered to pay $54.20 per share; Shares of the social media company closed Thursday at $37.39.

The world’s richest man said last month in an interview with Bloomberg News editor-in-chief John Micklethwait that there is “some unresolved issues” before the transaction can be completed.

“There is a limit to what I can say publicly”he pointed. “It is a somewhat delicate matter”.

Source: Gestion

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