The richest tech founders and executives lost $400 billion in 2022

Elon Musk, Jeff Bezos, and Mark Zuckerberg lead the way in losing money too.
Ameya Paleja
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Bezos, Zuckerberg, Musk

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Founders and CEOs of the world's biggest technology companies have together seen more than $400 billion wiped off from their fortunes in 2022, Markets Insider reported. Macroeconomic conditions have led to an outflow of money from tech stocks to safer havens, making billionaires poorer this year.

The pandemic years saw a major bull run by technology stocks as investors pumped more money into these companies that looked poised to survive the economic backlash of COVID-19. It was during these years that the likes of Apple and Microsoft reached $2 trillion valuations and Tesla, although a carmaker, saw a meteoric rise in its stock price.

The dream run that continued well into 2022, however, started to falter as inflation reached 40-year highs and the U.S. Federal Bank decided to step in. Interest rates that were virtually nil were periodically increased and as the year comes to an end, they have climbed to four percent today. Investors reacted to this, dropping tech stocks across the board. The tech-heavy Nasdaq 100 is down 41 percent since the beginning of the year.

Why investors fled tech stocks

As the U.S. Federal Bank hiked interest rates, borrowing money became more expensive and this reduced demand, which in turn softened prices that were inching higher. This was the intended outcome of the rate hikes.

However, the move had another impact which was improving the returns on savings and bonds, which are less risky assets, as compared to stock, Markets Insider explained in its post. Tech stocks, in particular, are valued on their potential cash flow in the future, but as the world heads into a recession, future earnings are bound to be impacted, making these stocks less attractive.

Investors parked their money in less risky assets and the valuations of tech stocks started dropping, wiping away billions from founders and CEOs whose personal fortunes are tied to the stocks they hold.

Musk, Bezos, and Zuck are the biggest losers

Elon Musk led the charge of biggest losers on the Billionaire lists as he saw fortunes of over $140 billion being wiped off in 2022. Jeff Bezos also lost significant chunks of his personal fortune as $86 billion has been wiped off after his company, Amazon's stock value has halved this year.

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Facebook founder Mark Zuckerberg who took the leap of faith into the metaverse last year saw his company stock drop nearly 66 percent this year and lost his place among the top 10 in Bloomberg's Billionaire List after his wealth plunged by over $81 billion in 2022.

Other noted tech billionaires such as Alphabet's Larry Page and Sergey Brin lost a combined $92 billion while Microsoft founder Bill Gates lost nearly $30 billion in 2022. Put together, founders and executives of these companies lost over $400 billion of personal fortune, which is equivalent to the valuation of companies such as Tesla ($345 billion) and Nvidia ($352 billion), as well as JP Morgan's market capitalization ($388 billion), Markets Insider said in its report.

The losses are still a small fraction of the trillions these individuals gobbled up when millions were losing their jobs in the pandemic. It remains to be seen if this setback is temporary or if it continues further into 2023 as well, as the U.S. Feds try and avoid complete strangulation of the economy by pushing it into a recession.

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