NEW YORK – For the vast majority of the world’s wealthiest people, 2022 was a year to forget.
It was not just the money that was lost, though it was staggering – almost US$1.4 trillion (S$1.9 trillion) was wiped from the fortunes of the richest 500 alone, according to the Bloomberg Billionaires Index.
Plenty of the pain, it turns out, was self-inflicted: the alleged fraud by one-time crypto wunderkind Sam Bankman-Fried; the devastating war waged by Russia on Ukraine that spurred crippling sanctions on its business titans; and, of course, the antics of new Twitter owner Elon Musk, who is worth US$138 billion less than he was on Jan 1.
Combined with a backdrop of widespread inflation and aggressive interest rate hikes, the year was a dramatic comedown for a group of billionaires whose fortunes swelled to unfathomable heights in the Covid-19 era of easy money.
In most cases, the bigger the rise, the more dramatic the fall: Mr Musk, Amazon founder Jeff Bezos, Binance founder Zhao Changpeng and Meta chief executive Mark Zuckerberg alone saw some US$392 billion erased from their cumulative net worth.
It was not all bad news for the billionaire class, though. Indian tycoon Gautam Adani surpassed Microsoft co-founder Bill Gates and investment guru Warren Buffett on the wealth index, while some of the world’s richest families, like the Kochs and the Mars clan, also added to their fortunes.
Here is a month-by-month review of the data and stories that defined a tumultuous year for billionaires.
January: Warning shots
Mr Elon Musk, the world’s richest person at the time, loses US$25.8 billion (S$34.6 billion) on Jan 27 after electric carmaker Tesla warns of supply challenges.
It is the fourth-steepest one-day fall in the history of the Bloomberg wealth index and foreshadows a rocky year ahead for Mr Musk, both personally and financially.
February: Oligarch wealth obliterated
Russia’s richest people collectively lose US$46.6 billion (S$62.5 billion) on Feb 24, the day President Vladimir Putin orders his army to invade Ukraine.
In short order, the authorities in the West target Russia’s oligarchs and their companies with sanctions that make it next to impossible for the business tycoons to keep control of their assets in the West. Russian tycoon Roman Abramovich, for example, announces that he is selling Chelsea Football Club.
The wealthiest Russians go on to lose another US$47 billion over the course of 2022 as the war grinds on.
March: China’s fortunes crushed
China’s markets go from bad to worse, erasing US$64.6 billion (S$86.6 billion) from the fortunes of the country’s wealthiest people on March 14.
They lose another US$164 billion in 2022 as strenuous Covid-19-containment efforts, a buckling property market, heightened scrutiny of the tech industry and trade tensions with the United States drag on the world’s second-largest economy.
This, combined with President Xi Jinping’s populist rhetoric, has more affluent Chinese plotting to get themselves – and their money – out of the country.
April: Musk’s Twitter gambit
Soon after revealing a 9.1 per cent stake in Twitter, Mr Elon Musk on April 14 offers to buy the company at a US$44 billion (S$59 billion) valuation.
To finance the deal, he initially plans to borrow billions, leverage more of his Tesla shares and pony up US$21 billion in cash, which analysts correctly predict will require offloading Tesla stock.
Markets deteriorate in the coming months and Mr Musk tries to devise an escape route, kicking off a months-long legal wrangle with Twitter. By the time the deal is completed in October, his net worth is US$39 billion lower than when he made his initial offer.
May: Boehly buys Chelsea
A group helmed by finance billionaire Todd Boehly clinches the £4.25 billion (S$6.9 billion) winning bid for Chelsea Football Club.
It is the highest price paid for a sports team, and it caps a frenzied two-month process that attracts more than 100 bidders from all over the world.
The net proceeds from the sale, including £1.6 billion in waived debt owed to previous owner Roman Abramovich by the team, are earmarked for charity benefiting Ukraine.
June: Waltons win Broncos
Mr Rob Walton, heir to the Walmart fortune, agrees to buy American football team Denver Broncos for US$4.65 billion (S$6.2 billion), setting a record for a US sports team.
The Walton consortium includes Mr Walton’s daughter Carrie, her husband Greg Penner, Ariel Investments president Mellody Hobson, Formula One driver Lewis Hamilton and former US secretary of state Condoleezza Rice.
The deal makes Ms Hobson and Dr Rice the first black women to hold an ownership stake in a National Football League team.
July: China’s home builders crumble
Ms Yang Huiyan loses the title of Asia’s wealthiest woman after her fortune more than halves over seven months amid China’s unfolding property crisis.
Country Garden Holdings, which Ms Yang inherited from her father, benefited from a home-building spree in recent years.
But the country’s efforts to curb real estate prices and President Xi Jinping’s crackdown on consumption put a stranglehold on the sector, stalling projects and leading frustrated home owners to quit paying mortgages on halted developments. Country Garden’s stock price – and Ms Yang’s wealth – has yet to recover.
August: Adani ascends
With the world roiled by the war in Ukraine, Mr Gautam Adani, an Indian coal miner with a fast-expanding empire, surges past Mr Bill Gates and LVMH chairman Bernard Arnault to become the world’s third-richest person at the end of August. It is the highest ranking for an Asian billionaire.
Aligning himself with Indian Prime Minister Narendra Modi, Mr Adani has used debt to rapidly diversify his relatively opaque conglomerate, Adani Group, into ports, data centres, highways and green energy. In September, he briefly passes Mr Jeff Bezos to become the world’s second-richest person.
September: Zuckerberg’s wipeout
Even in a rough year for US tech titans, Mr Mark Zuckerberg’s losses stand out.
By mid-September, his net worth plunges by US$71 billion (S$95 billion) from Jan 1 – a 57 per cent loss – on account of a costly pivot to the metaverse and an industrywide downturn that has dragged down the stock price of Facebook parent Meta Platforms.
Over the course of the year, he will fall 19 ranks on the Bloomberg wealth index, finishing 2022 at 25th, his lowest position since 2014.
October: Covid-19 billionaires collapse
The bubble of the Covid-19 economy is deflating fast, and with it, the fortunes of the so-called Covid-19 billionaires – moguls who minted enormous fortunes from vaccines (Moderna’s Mr Stephane Bancel), online shopping (Coupang’s Mr Bom Kim) and, of course, videoconferencing (Zoom’s Mr Eric Yuan).
The 58 billionaires whose fortunes multiplied at a blistering pace from such pandemic industries see an average decline in the value of their assets of 58 per cent from their peak, a far sharper fall than the other constituents of the Bloomberg wealth index.
November: From $21 billion to zero
Sam Bankman-Fried’s crypto exchange FTX collapses after a liquidity crunch reveals gaping holes in his empire’s balance sheet and an absence of risk controls.
The 30-year-old’s US$16 billion (S$21.4 billion) fortune is erased in less than a week. At its peak, his net worth was valued at US$26 billion. The debacle leaves one million clients wondering if they will get their money back.
Binance’s Mr Zhao Changpeng sees his net worth tumble by US$84 billion in 2022, while other crypto billionaires, such as entrepreneurs and brothers Cameron and Tyler Winklevoss, distance themselves from FTX’s collapse.
December: Musk dethroned
Mr Elon Musk is unseated as the world’s richest person by Mr Bernard Arnault, the French luxury tycoon.
While Mr Arnault’s fortune has not been immune to the tough 2022, down about US$16 billion (S$21.4 billion) for the year, it pales next to Mr Musk’s losses of more than US$138 billion.
How did we get here?
Take a market downturn, add an impulse purchase of an unprofitable social media company, mix in a heap of leverage, more supply chain woes and an insatiable desire for attention. Easy come, easy go. BLOOMBERG
