How Jeff Bezos became the world's second richest man
For Bezos and other figures at the helm of the 'new economy,' personal wealth often tracks the stock price of their companies.
With a net worth of $75.6 billion, e-commerce tycoon Jeff Bezos is now the planet's second-wealthiest person.
The Amazon.com founder edged out investor Warren Buffett to claim the No. 2 spot on Bloomberg’s Billionaires Index Thursday. Microsoft co-founder Bill Gates still has the throne with a net worth of $86 billion.
At these stratospheric levels of wealth, not all net worth calculations come out the same. A separate ranking, by Forbes, put Mr. Bezos’s wealth at a slightly lower $72.1 billion on Thursday afternoon.
But a mere half billion doesn’t debunk a larger trend at work in both rankings: For Bezos, Gates, and other figures at the helm of the “new economy,” personal wealth often tracks their companies' stock prices.
“Going public is one of capitalism's major sacraments, conferring instant superwealth on a few talented and lucky entrepreneurs,” observed Forbes in 1986. At the time, one of these “talented and lucky entrepreneurs, 30-year-old Bill Gates, had just profited handsomely off Microsoft’s Initial Public Offering. “He got only $1.6 million for the shares he sold [at the time], but going public put a market value of $350 million on the 45% stake he retains.”
A few years before, Apple’s IPO had pushed Steve Jobs’s net worth into the nine-digit range, and both men’s net worth would later grow into the billions. In recent years, other software developers, including Mr. Bezos and Facebook’s Mark Zuckerberg, have followed suit.
This road to riches runs both ways. Last June, as medical-testing company Theranos faced challenges, Forbes revised CEO Elizabeth Holmes’s net worth downward, from $4.5 billion to “nothing.”
For the moment, both Amazon shares and Mr. Bezos’s portfolio are riding high. On Tuesday, Amazon acquired Middle Eastern e-commerce giant Souq.com. That move sent its stock price up by $18.32 per share, increasing Bezos’s net worth by $1.5 billion, Bloomberg reports.
What to do with it? Mr. Bezos can now easily afford many of the priciest items for sale on his website, including a half-ton kettle cooker/mixer ($58,511.14) or even a used vinyl single of Hidden Crate (remix) for a cool billion – but not a Windows XP-only copy of AutoCAD LT which, at just under a trillion dollars, was the most expensive piece of software offered on the website as of 2011.
Other members of the 11-digit club have been finding more constructive outlets for their wealth, as demonstrated by the Giving Pledge, a promise by some of the world's wealthiest families and individuals to dedicate their wealth to philanthropy.
Bezos, too, seems to be channeling his fortune towards high-minded goals, such as buying The Washington Post to promote quality journalism or, through private-spaceflight firm Blue Origin, realizing a future with “millions of people living and working in space.”
It’s a goal that only money like his can buy.