For the world’s richest people, there used to be three ways to quickly see a fortune disappear: death, default or divorce.
The past few months have added another risk: sky-high valuations of giant technology companies falling from the stratosphere.
Mark Zuckerberg’s wealth plummeted as much as $31 billion on Thursday, the third-biggest one-day drop in wealth since the Bloomberg Billionaires Index began compiling data in 2012.
Two of his Facebook co-founders, Eduardo Saverin and Dustin Moskovitz, saw their fortunes tumble $4.6bn and $3.1bn, respectively, as Meta Platforms shares plunged 26 per cent.
Over at Spotify, chief executive Daniel Ek’s net worth has fallen by $1.1bn so far in 2022, to $2.7bn.
An 11-digit move in wealth had previously been reserved for monumental events in the lives of billionaires.
Some recent high-profile examples include Jeff Bezos’s divorce in 2019 and Bill Hwang losing in a matter of days when his Archegos Capital Management imploded last year under the weight of margin calls.
Now it’s becoming almost routine — especially with the volatile swings in Elon Musk’s fortune. The world’s richest person lost $35bn in a day in November as Tesla shares fell following a Twitter poll in which Mr Musk asked voters if he should sell 10 per cent of his stake in the company.
head of Goldman Sachs Group’s investment strategy group
His net worth also plunged $25.8bn last week, adding to a long list of daily declines that dominate the list of the top 10 biggest drops ever recorded by Bloomberg’s index.
Of course, Mr Musk and other tech titans can add to their fortunes in a blink of an eye, too.
Shares of Amazon surged about 18 per cent in extended trading on Thursday, after profit beat estimates and it raised the price of its Prime subscription service.
That’s a boon for Mr Bezos, who slipped one spot to the world’s third-richest person on Thursday, the first time he’s fallen out of the top 2 since September 2017.
An 18 per cent increase would boost his net worth by $25bn, which would be the sixth-biggest gain on record in a decade of Bloomberg data.
“This kind of volatility is to be expected when you’re at these valuations,” Sharmin Mossavar-Rahmani, head of Goldman Sachs Group’s investment strategy group, said last week.
Even if broader declines in tech shares are contained, Mr Zuckerberg’s losses are especially striking because he’s been a mainstay among the world’s 10 richest people since mid-2015. He nearly fell out of the top 10 after Thursday’s rout, ranking just ahead of Mukesh Ambani, Asia’s richest man, in the Bloomberg wealth index.
It’s another indication of the unpredictable ways in which the US rebound from the Covid-19 pandemic will ripple across markets, companies and the economy.
As You Were
Liam Gallagher
(Warner Bros)
War on waste
Living in...
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Match info:
Manchester City 2
Sterling (8'), Walker (52')
Newcastle United 1
Yedlin (30')
On Women's Day
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Abandon
Sangeeta Bandyopadhyay
Translated by Arunava Sinha
Tilted Axis Press
Ready Player One
Dir: Steven Spielberg
Starring: Tye Sheridan, Olivia Cooke, Ben Mendelsohn, Mark Rylance
How Tesla’s price correction has hit fund managers
Investing in disruptive technology can be a bumpy ride, as investors in Tesla were reminded on Friday, when its stock dropped 7.5 per cent in early trading to $575.
It recovered slightly but still ended the week 15 per cent lower and is down a third from its all-time high of $883 on January 26. The electric car maker’s market cap fell from $834 billion to about $567bn in that time, a drop of an astonishing $267bn, and a blow for those who bought Tesla stock late.
The collapse also hit fund managers that have gone big on Tesla, notably the UK-based Scottish Mortgage Investment Trust and Cathie Wood’s ARK Innovation ETF.
Tesla is the top holding in both funds, making up a hefty 10 per cent of total assets under management. Both funds have fallen by a quarter in the past month.
Matt Weller, global head of market research at GAIN Capital, recently warned that Tesla founder Elon Musk had “flown a bit too close to the sun”, after getting carried away by investing $1.5bn of the company’s money in Bitcoin.
He also predicted Tesla’s sales could struggle as traditional auto manufacturers ramp up electric car production, destroying its first mover advantage.
AJ Bell’s Russ Mould warns that many investors buy tech stocks when earnings forecasts are rising, almost regardless of valuation. “When it works, it really works. But when it goes wrong, elevated valuations leave little or no downside protection.”
A Tesla correction was probably baked in after last year’s astonishing share price surge, and many investors will see this as an opportunity to load up at a reduced price.
Dramatic swings are to be expected when investing in disruptive technology, as Ms Wood at ARK makes clear.
Every week, she sends subscribers a commentary listing “stocks in our strategies that have appreciated or dropped more than 15 per cent in a day” during the week.
Her latest commentary, issued on Friday, showed seven stocks displaying extreme volatility, led by ExOne, a leader in binder jetting 3D printing technology. It jumped 24 per cent, boosted by news that fellow 3D printing specialist Stratasys had beaten fourth-quarter revenues and earnings expectations, seen as good news for the sector.
By contrast, computational drug and material discovery company Schrödinger fell 27 per cent after quarterly and full-year results showed its core software sales and drug development pipeline slowing.
Despite that setback, Ms Wood remains positive, arguing that its “medicinal chemistry platform offers a powerful and unique view into chemical space”.
In her weekly video view, she remains bullish, stating that: “We are on the right side of change, and disruptive innovation is going to deliver exponential growth trajectories for many of our companies, in fact, most of them.”
Ms Wood remains committed to Tesla as she expects global electric car sales to compound at an average annual rate of 82 per cent for the next five years.
She said these are so “enormous that some people find them unbelievable”, and argues that this scepticism, especially among institutional investors, “festers” and creates a great opportunity for ARK.
Only you can decide whether you are a believer or a festering sceptic. If it’s the former, then buckle up.
Dust and sand storms compared
Sand storm
- Particle size: Larger, heavier sand grains
- Visibility: Often dramatic with thick "walls" of sand
- Duration: Short-lived, typically localised
- Travel distance: Limited
- Source: Open desert areas with strong winds
Dust storm
- Particle size: Much finer, lightweight particles
- Visibility: Hazy skies but less intense
- Duration: Can linger for days
- Travel distance: Long-range, up to thousands of kilometres
- Source: Can be carried from distant regions
The%20specs
Scores
Wales 74-24 Tonga
England 35-15 Japan
Italy 7-26 Australia
SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20Z%20FOLD%204
PROFILE OF HALAN
Started: November 2017
Founders: Mounir Nakhla, Ahmed Mohsen and Mohamed Aboulnaga
Based: Cairo, Egypt
Sector: transport and logistics
Size: 150 employees
Investment: approximately $8 million
Investors include: Singapore’s Battery Road Digital Holdings, Egypt’s Algebra Ventures, Uber co-founder and former CTO Oscar Salazar
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Shelina Janmohamed: Why shouldn't a spouse be compensated fairly for housework?
Samar Elmnhrawy: How companies in the Middle East can catch up on gender equality
The National Editorial: Is there much to celebrate on International Women's Day 2021?
SPEC%20SHEET%3A%20APPLE%20M3%20MACBOOK%20AIR%20(13%22)
The Limehouse Golem
Director: Juan Carlos Medina
Cast: Olivia Cooke, Bill Nighy, Douglas Booth
Three stars
Lexus LX700h specs
Engine: 3.4-litre twin-turbo V6 plus supplementary electric motor
Power: 464hp at 5,200rpm
Torque: 790Nm from 2,000-3,600rpm
Transmission: 10-speed auto
Fuel consumption: 11.7L/100km
On sale: Now
Price: From Dh590,000
Jurassic%20Park
More from Aya Iskandarani
More from Tom Fletcher
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Damien McElroy: Anti-science attitudes in America are proving lethal
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Editorial: The fight against Covid-19 should be guided by science
Like a Fading Shadow
Antonio Muñoz Molina
Translated from the Spanish by Camilo A. Ramirez
Tuskar Rock Press (pp. 310)
The%20specs
UAE squad
Esha Oza (captain), Al Maseera Jahangir, Emily Thomas, Heena Hotchandani, Indhuja Nandakumar, Katie Thompson, Lavanya Keny, Mehak Thakur, Michelle Botha, Rinitha Rajith, Samaira Dharnidharka, Siya Gokhale, Sashikala Silva, Suraksha Kotte, Theertha Satish (wicketkeeper) Udeni Kuruppuarachchige, Vaishnave Mahesh.
UAE tour of Zimbabwe
All matches in Bulawayo
Friday, Sept 26 – First ODI
Sunday, Sept 28 – Second ODI
Tuesday, Sept 30 – Third ODI
Thursday, Oct 2 – Fourth ODI
Sunday, Oct 5 – First T20I
Monday, Oct 6 – Second T20I
Race 3
Produced: Salman Khan Films and Tips Films
Director: Remo D’Souza
Cast: Salman Khan, Anil Kapoor, Jacqueline Fernandez, Bobby Deol, Daisy Shah, Saqib Salem
Rating: 2.5 stars
The National's picks
4.35pm: Tilal Al Khalediah
5.10pm: Continous
5.45pm: Raging Torrent
6.20pm: West Acre
7pm: Flood Zone
7.40pm: Straight No Chaser
8.15pm: Romantic Warrior
8.50pm: Calandogan
9.30pm: Forever Young
SPEC%20SHEET%3A%20SAMSUNG%20GALAXY%20S24%20ULTRA
BULKWHIZ PROFILE
Date started: February 2017
Founders: Amira Rashad (CEO), Yusuf Saber (CTO), Mahmoud Sayedahmed (adviser), Reda Bouraoui (adviser)
Based: Dubai, UAE
Sector: E-commerce
Size: 50 employees
Funding: approximately $6m
Investors: Beco Capital, Enabling Future and Wain in the UAE; China's MSA Capital; 500 Startups; Faith Capital and Savour Ventures in Kuwait
On Women's Day
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Samar Elmnhrawy: How companies in the Middle East can catch up on gender equality
The National Editorial: Is there much to celebrate on International Women's Day 2021?
Justin Thomas: Challenge the notion that 'men are from Mars, women are from Venus'
Red flags
- Promises of high, fixed or 'guaranteed' returns.
- Unregulated structured products or complex investments often used to bypass traditional safeguards.
- Lack of clear information, vague language, no access to audited financials.
- Overseas companies targeting investors in other jurisdictions - this can make legal recovery difficult.
- Hard-selling tactics - creating urgency, offering 'exclusive' deals.
Courtesy: Carol Glynn, founder of Conscious Finance Coaching
Pandemic Parenting
Kareem Shaheen on Canada
Habtoor interview
COMPANY PROFILE
● Company: Bidzi
● Started: 2024
● Founders: Akshay Dosaj and Asif Rashid
● Based: Dubai, UAE
● Industry: M&A
● Funding size: Bootstrapped
● No of employees: Nine
Ferrari 12Cilindri specs
Engine: naturally aspirated 6.5-liter V12
Power: 819hp
Torque: 678Nm at 7,250rpm
Price: From Dh1,700,000
Available: Now
