A pandemic-fueled tech stock surge has led to a reshuffling at the top of the U.S. billionaires list.
MacKenzie Scott, a novelist and philanthropist who recently divorced Amazon founder Jeff Bezos, is now the wealthiest woman in the world. Last week, Tesla CEO Elon Musk overtook Facebook CEO and co-founder Mark Zuckerberg to become the third-richest man in the world, after Jeff Bezos and Bill Gates.
Since pandemic lockdowns started in March, the combined U.S. billionaire wealth has grown by nearly $800 billion, or over 25 percent, according to an analysis by Americans for Tax Fairness, an advocacy group.
As part of her divorce, Scott got a 4 percent stake in Amazon, whose stock has been on a tear as coronavirus-induced lockdowns propel online sales and home deliveries. Shares have risen from nearly $2,000 to $3,500 since the start of the year.
Tesla stock rallied after a stock split that took effect on Monday, and has soared by 500 percent this year as investors price in expectations that Tesla will dominate the electric vehicle market for the long term. Retail investors on low-cost, low-entry platforms such as Robinhood have also made the stock a favorite, generating self-fulfilling momentum that vastly outstrips the company’s price to earnings ratio, a classic measurement of a stock’s worth.
Musk’s personal fortune has tripled since March, the beginning of the pandemic shutdowns. As part of a recently negotiated pay package, his board will give him another $50 billion if he meets all of a set of agreed-upon performance goals.
While it’s been a wild and crazy carousel at the top of the billionaire index, the blistering pace of wealth accumulation comes in sharp contrast to the economic devastation that millions of Americans at the other end of the spectrum are facing.
The Federal Reserve estimated that net household worth fell by a record 5.6 percent in the first quarter, the biggest single-quarter decline since the 1950s.
With unemployment at 10.2 percent, more than 1 million people a week still filing for first-time unemployment benefits, and lawmakers still at a stalemate over additional emergency funding, some Americans have turned have turned to crowdfunding to keep their stores open, pay for medical procedures — and even funerals.
In addition, an estimated 40 million Americans could potentially be turned out of their home in the coming months. President Donald Trump said Tuesday that the Centers for Disease Control and Prevention would use its authority to halt evictions through the end of the year.
“The growth in billionaire wealth — alongside the collapsing health and fortunes of most working class and low income households — is grotesque and unseemly,” said Chuck Collins, director of the Program on Inequality at the Institute for Policy Studies.
While Musk has dismissed coronavirus restrictions as “fascist,” has tweeted that he wants to sell “almost all physical possessions,” and has complained that the Tesla stock price is “too high,” Scott is one of the billionaires who have signed “The Giving Pledge,” a commitment to donate the majority of their wealth. Out of her over $50 billion net worth, Scott recently gave $1.7 billion to a plethora of nonprofit organizations and historically black colleges.