Jeff Bezos and Elon Mussos are among 6 richest Americans who have seen their wealth disappear by nearly $400 billion.

Elon Musk, Jeff Bezos.John Locher/AP/Odd Andersen/AFP via Getty Images
Eight of the richest Americans have had their fortunes reduced by close to $400 billion this year. Elon Musk’s net worth shrank by $140billion, while Jeff Bezos has lost $86billion. This is due to rising interest rates and historic inflation.

As historic inflation, high interest rates and rising fears of recession continue to batter the stock market, eight of America’s wealthiest Americans have had their fortunes wiped out by nearly $400 billion.

According to Bloomberg Billionaires Index, Elon Musk, Tesla CEO, has seen his net worth plummet by $140 billion. This slashes his wealth to $130 Billion as of Tuesday’s close.

This sharp drop is due to the approximately 70% drop in Tesla stock this past year. It was driven by investors switching technology stocks for safer assets. They worry that Musk’s Twitter account will be a distraction and that a US economic downturn or other headwinds could impact the automaker’s growth.

Amazon founder Jeff Bezos has seen his wealth plummet by $86 billion while Alphabet cofounders Larry Page, Sergey Brin, and their fortunes shrink by $91 billion. Bill Gates, Microsoft’s cofounder, has seen his net worth plummet by $29billion while Steve Ballmer, the former CEO of Microsoft has suffered a $21billion loss.

Larry Ellison, cofounder of Oracle and Tesla investor, has also suffered a $17B loss to his fortune. Warren Buffett has seen his wealth drop by only $3 billion. These eight Americans are joined by Bernard Arnault of LVMH, Gautam Adani from Adani Group, and Mukesh Ambani from Reliance Industries in the top 11 places in Bloomberg’s global wealth rankings.

US fortunes are shrinking due to sharp declines in tech stocks. Amazon’s stock value has fallen by half, Alphabet shares are down 40%, Microsoft 29%, and Oracle 8.

Although Buffett’s Berkshire Hathaway shares are increasing in value, other stocks of the investor have declined and he has also donated shares to charities. His fortune has plummeted by $3 billion in the last year.

It is estimated that $886 billion has been taken from the combined fortunes of eight of America’s richest Americans. This figure is comparable to JPMorgan’s total market capitalization and comfortably surpasses Tesla’s ($345 billion), Nvidia’s ($352 billion) and the combined market value of all of America’s largest companies.

The sell-off of technology stocks this year has caused a large portion of billionaires’ wealth to be lost. This has resulted in the Nasdaq index falling 35% since January. In response to inflation which rose to 40-year highs in 2018, the Federal Reserve raised interest rates to over 4% in March.

Higher rates mean borrowing is more expensive which can reduce demand and alleviate upward pressure on prices. They also boost returns on savings accounts and bonds, which makes them more attractive than riskier assets like stocks.

Tech stocks are valued largely on the potential cash flows they could generate in the future. These stocks become less appealing to investors when they are priced high, haven assets offer higher returns, and a recession threatens to slow earnings growth and sap demand.

It is because tech stocks are losing their appeal, along with specific headwinds like flagging advertising demand, and the impact of China’s rolling COVID-19 locksdowns, that the richest Americans have seen a portion of their fortunes disappear this year.

Continue reading: Bank of America’s stock chief warns the S&P 500’s popularity may be its greatest enemy as investors flock in. We were told her plan to avoid volatility in a volatile 2023 market.

Business Insider has the original article.
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By: tmohamed@businessinsider.com (Theron Mohamed)
Title: Elon Musk, Jeff Bezos, and the 6 other richest Americans have suffered a nearly $400 billion wealth wipeout this year
Sourced From: markets.businessinsider.com/news/stocks/musk-bezos-billionaires-wealth-tech-stock-market-fed-inflation-recession-2022-12
Published Date: Wed, 28 Dec 2022 11:27:49 +0000