Billionaires: Elon Musk loses his spot as the world's second-richest person
In our fortnightly round-up, Melinda French Gates receives a third share transfer from Cascade Investments and Yusaku Maezawa will travel to the International Space Station as a tourist in December
Elon Musk’s Twitter posts keep sending Bitcoin prices tumbling. His own fortune is heading in the same direction.
The Tesla chief executive lost his spot as the world’s second-richest person last week to LVMH chairman Bernard Arnault after the electric car maker’s shares fell by 2.2 per cent. That was on top of a slump amid a rout in technology stocks and fresh signs of trouble in Tesla's China business.
Mr Musk, 49, who held the top spot on the Bloomberg Billionaires Index as recently as March, now has a fortune of $160.6 billion, down 24 per cent from its January high.
The drop comes after a turbulent period for Mr Musk, who sent Bitcoin falling by as much as 15 per cent last week after saying on Twitter that Tesla was no longer accepting the digital currency as payment.
He also whipsawed Dogecoin prices after tweeting that he was working with developers of the Shiba Inu-themed token to improve transaction efficiencies.
Mr Musk wreaked havoc again when he seemed to imply that Tesla may sell or had already sold its Bitcoin holdings before later clarifying in a tweet on May 17 that the company had done no such thing.
Mr Musk became the world’s richest person in January after Tesla’s shares surged by about 750 per cent last year amid a boom in technology-driven stocks. Despite reporting a record first-quarter profit, the California-based company’s shares have since fallen by about a fifth amid a global semiconductor shortage and increasing competition from traditional car makers.
Mr Musk’s fortune has dropped by about $9.1bn this year, the most among US-based billionaires tracked by Bloomberg’s wealth index.
Meanwhile, Mr Arnault, 72, has added the most, with his net worth climbing by about $47bn to $161.2bn as sales of his company’s luxury goods surge in China and other parts of Asia.
Cascade Investment, the investment company created by Bill Gates, transferred stock in Deere & Co to Melinda Gates, bringing the total amount she has received this month – since the couple announced their intention to divorce – to more than $3bn.
The investment vehicle transferred about 2.25 million shares worth about $851 million, according to a regulatory filing. That came after similar disclosures tied to Mexican companies Coca-Cola Femsa and Grupo Televisa and shares worth about $1.8bn in Canadian National Railway and AutoNation.
The separation involves the transfer of wealth on a scale that is rarely seen. Cascade, which is managed by Michael Larson, has a complex array of holdings, including value stocks, private equity, energy, hospitality and venture capital. It controls equity holdings worth $52bn. The couple are also among the largest landowners in America.
Agricultural machinery maker Deere is one of its biggest positions, with Cascade holding a stake of more than 10 per cent valued at $11.9bn. The largest public holding is a $12bn stake in waste collection company Republic Services, Bloomberg data shows.
Their divorce comes after the 2019 divorce of Amazon founder Jeff Bezos and MacKenzie Scott, who received a quarter of Mr Bezos's 16 per cent stake in Amazon in the split. Ms Scott, now the fourth-richest woman in the world, became one of the most prolific donors of 2020, contributing to gender equality causes alongside Mrs Gates.
The Gates fortune is valued at about $145bn, according to the Bloomberg Billionaires Index, and could prove more complex to carve up than the Bezos assets, which were largely concentrated in Amazon stock.
Billionaire Yusaku Maezawa, 45, who will travel to the International Space Station as a tourist in December aboard a Russian spacecraft, is a former musician who aspired to be a rock star. He is worth $1.9bn and has a penchant for pricey modern art and space travel.
Mr Maezawa, founder of Japan’s largest online fashion mall, is the country’s 30th richest person, according to Forbes.
It will be the first time the Russian space agency Roscosmos has taken a tourist to the ISS since 2009.
Mr Maezawa is known for his luxury lifestyle – including private jets, yachts, designer watches and art.
He made his fortune as the founder of online fashion shop Zozo, which he sold to Yahoo! Japan in 2019.
Mr Maezawa hit the headlines in 2018 when he was announced as the first man to book a spot on a 2023 mission aboard a lunar spaceship being developed by Roscosmos rival SpaceX, led by Mr Musk.
He placed an online advertisement calling for a girlfriend to join him on the flight – only to abruptly cancel the hunt, despite attracting about 30,000 applicants.
His love of art became a focus in 2017 when he bought a Jean-Michel Basquiat masterpiece worth $110.5m.
Billionaire investor and media executive John Malone may see the value of his Discovery shares cut by about $280m as a result of its merger with AT&T’s media businesses – a deal he supports.
Mr Malone owns 6.19 million Discovery Class B shares, which currently trade at $78 each, making his holding worth about $483m.
However, under the deal announced last week, those shares will convert on a one-for-one basis into the stock of the new company, the same ratio as Discovery’s Class A common shares, which trade at around $33 each.
“I am delighted to fully support this transaction, without asking for or receiving a premium for my high vote shares,” Mr Malone said last week on Tuesday. “I believe we are creating real value for shareholders and a legacy investment for my grandkids.”
Mr Malone’s B stock carries super-voting rights – 10 each a share. They have traded at a modest premium to the other common shares but rose in March in the aftermath of the stock sell-off by Archegos Capital Management to reach $128 at one point, giving the cable TV executive a paper windfall of $353m. His statement suggests that premium will evaporate with the conversion, along with his extra voting rights.
By contrast, the Newhouse family is receiving 13.1 shares of the new common stock in exchange for each of its Series A-1 preferred shares. In addition, they will be allowed to nominate two directors to the board of the new company.
I believe we are creating real value for shareholders and a legacy investment for my grandkids
John Malone, billionaire investor
The Newhouse family’s company, Advance, said it had rights to approve the chief executive, annual budgets, major transactions and three directors. In exchange for permanently relinquishing those rights, they received additional shares, determined by an independent committee, the company said.
The deal, which will merge AT&T’s Warner Bros studio, CNN and HBO businesses with Discovery, the parent of HGTV and Animal Planet, was announced on May 17.
AT&T investors get 71 per cent of a new publicly traded company, while shareholders of Discovery will own the balance. The deal is expected to close in the middle of next year.
In his statement, Mr Malone cited the “industrial logic” of putting the businesses together. Discovery chief executive David Zaslav, who will lead the combined operation, was asked why Mr Malone is not receiving a premium for his shares during a conference call.
“He is a very generous person,” said Mr Zaslav. “He has been extraordinarily generous with me. And from the very beginning, he said, ‘I want this for the shareholders’.”
Updated: June 3, 2021 02:17 PM