High inflation results in lower purchasing power and higher cost of living. And no one is immune to its effects. As inflation climbs, Elon Musk, Jeff Bezos and Bill Gates have lost billions as the market value of their companies plummets. The United States is currently facing inflation that is at its highest level in four decades and it looks like people won’t get much respite in the months ahead.
The billionaires’ billion dollar downfall
As the wealthiest people in the world have become less wealthy, the poor have been pushed to the brink of poverty. The Bloomberg Billionaires Index 2022 reported that Elon Musk, Jeff Bezos and Bill Gates had collectively lost more than $115 billion in the past five months.
Musk’s net worth dropped by $46.4 billion, Bezos’ net worth dropped by $53.2 billion and Gates saw his fortune plummet by $15.1 billion.
In 2021, Elon Musk was the highest paid CEO among Fortune 500 CEOs. As CEO of Tesla and SpaceX, he received total compensation of nearly $23.5 billion. According to Bloomberg Billionaires Index 2022, as of the close of trading hours on May 27, Musk was worth $224 billion, Bezos $139 billion and Gates $123 billion. While Musk and Bezos occupy first and second place respectively, Bernard Arnault, the chairman of French luxury conglomerate LVMH and the third richest person in the world ahead of Gates, has lost $44.7 billion since January to $133 billion. of dollars.
Elon Musk has lost billions because his net worth is mostly tied to stocks of his companies, SpaceX and Tesla. The recent stock market crash wiped out billions of 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 $6.5 billion to his net worth, thanks to his timely and wise investments.
Inflation sets record
In April 2022, CNN revealed that rising inflation has devastated household budgets, leaving them with little discretionary spending. In the United States, inflation is extremely high when it comes to food and gasoline.
This has a negative effect on daily life, as low-income households spend almost 77% of their budget on basic necessities, compared to 31% for essentials of higher-income households.
High inflation and economic instability have also led companies to lower their growth and revenue forecasts. A risk-averse Wall Street struggled to adjust to the changes, while the crash in tech stocks left investors reeling. In May, big tech lost more than $1 trillion in value, with the world’s largest companies blaming rising inflation, rising costs and supply chain issues for failing to meet expectations .
Elon Musk lost billions as Tesla shares fell more than 8%. It didn’t help matters that the Musk-Twitter deal, which was supposed to net him billions in profits, also saw a downturn after Snap’s earnings announcement. When Snap slashed its forecast, it impacted social media shares, causing Twitter to plummet and Musk suffering nearly $40 million in losses on the deal. If he decides to withdraw from the agreement, he will have to pay a fine of 1 billion dollars. In January, Musk lost almost a tenth of his fortune, despite Tesla posting record profits.
As of May 10, Amazon shares were trading more than 40% below the company’s 52-week high of $3,773.08, which has not been replicated since February 2020. The US Treasury Secretary, Janet Yellen told lawmakers she wouldn’t be surprised to see the market turmoil continue. Summer. Meanwhile, after letting Satya Nadella take the helm, Gates has relatively less Microsoft stock in his kitty because he’s chairman.
As major companies cut their earnings forecasts, some are also cutting headcount or implementing hiring freezes until they have a better idea of how things will develop.
Elon Musk, Jeff Bezos and Bill Gates have lost billions but retained their positions on the billionaire list while many have lost their life savings as an unstable economic climate casts dark clouds over the future.