The last month has seen tech billionaires − including Jeff Bezos (Amazon), MacKenzie Bezos (Amazon), Eric Yuan (Zoom), Steve Ballmer (Microsoft) and Elon Musk (Tesla and SpaceX) − increasetheir net
worth by over $1 billion each, even as the coronavirus (COVID-19) pandemic rattles the global economy.
A new report published by the Institute for Policy Studies (IPS) titled: “Billionaire Bonanza 2020: Wealth Windfalls, Tumbling Taxes and Pandemic Profiteers”, details how the combined wealth of some of America’s billionaires increased by nearly 10% ($282 billion) from 18 March.
While the impact of the pandemic has resulted in weaker financial markets globally, with most businesses forced to halt operations, the report found that some tech billionaires are well-insulated from economic losses as demand for their companies’ services soars.
“Ordinary people around the globe may now be struggling to survive a ravaging public health and economic crisis, but early indicators suggest the billionaire class will maintain its wealth or even see a major surge. Since 1 January 2020, 34 of the wealthiest 170 US billionaires have seen their total net worth increase by tens of millions of dollars. These include eight billionaires who, as of 10 April, have seen wealth gains of over $1 billion,” according to the IPS report.
As millions of people lose their jobs across the globe due to the ramifications of the lockdown laws, IPS exposes the social reality of the extreme inequality which could overwhelm economies across the globe.
The report notes the wealth surge of Bezos, who owns about 15.1% of online retailer Amazon, is unprecedented in modern financial history, as the closure of hundreds of thousands of small businesses gives the company an opportunity to increase its market share and strengthen its place in the supply chain.
As of 15 April,Amazon’s stock climb has seen his fortune increase by an estimated $25 billion since 1 January.
“Bezos’s wealth has been trending upward since 12 March, with no company better positioned to profit from the pandemic than Amazon,” says Chuck Collins, co-author of the report.
Video-conferencing platform Zoom has seen a 50% jump in users, from 200 million to 300 million in the last three weeks, due to a surge in usage of remote work technology. This has boosted the net worth of billionaire co-founder Yuan, who has seen an over $1 billion jump in his net worth.
“The COVID-19 pandemic made Yuan one of the few billionaires whose net worth increased as the markets crashed in late February, an unsurprising gain since social distancing has increased the demand for video-conferencing.”
Ballmer, former Microsoft CEO, saw his wealth increase by $2.2 billion, while Musk, who holds an 18.5% stake in Tesla shares, has seen a 73% increase in the value of the shares, since the beginning of the year.
SpaceX has partnered with Medtronic, a medical
device company, to help increase the firm’s capacity to produce ventilators, while engineers at Tesla are creating prototypes from used car parts.
“Ballmer, who is no longer in a position of leadership at Microsoft, remains a significant shareholder in the company. Microsoft has two online video-conferencing platforms, Skype and Teams. Skype’s daily activity has increased 70%, a modest gain compared to a 1 000% upsurge in March for Microsoft Teams,” notes the report.
Reed Hastings, co-founder and CEO of Netflix, who owns 1.3% of the company, which has seen a recent uptick in stock value, increased his net worth by $420 million, according to the report.
However, the report notes the world’s richest are not immune to the devastating impact of the coronavirus, as the drop in the number of billionaires this year reflects the economic impact the pandemic is already having.
The total combined net worth of the global billionaire class declined from $8.7 trillion in 2019 to $8 trillion in 2020, due both to the pandemic and roiling global markets.
A total of 267 dropped off the list because their fortunes fell below $1 billion. Another 21 who made the 2019 list have since passed away.
“Billionaire wealth, as these numbers show, tends to rebound from market meltdowns. In the immediate aftermath of the global economic crisis of 2008, the Forbes 400 saw their combined wealth decline $300 billion from $1.57 trillion in 2008, to $1.27 trillion in 2009.
“Within 30 months of the September 2008 crash, most of these fortunes recovered. Between 2010 and 2020, the combined wealth of the US billionaire class surged by a staggering 80.6%, from $1.631 trillion to $2.947 trillion in 2020 dollars,” according to IPS.
