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May 23, 2020, 9:30 a.m. EDT

No, America’s billionaires didn’t get $434 billion richer during the pandemic — quite the opposite, in fact

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By Steve Goldstein, MarketWatch


Getty Images
Jim Walton, whose wealth has expanded by about $3 billion during the crisis, applauds at a Walmart shareholders event on June 1, 2018, in Fayetteville, Ark.

Americans for Tax Fairness and the Institute for Policy Studies released a report showing a startling statistic: America’s billionaires got $434 billion richer amid the pandemic.

“The surge in billionaire wealth during a global pandemic underscores the grotesque nature of unequal sacrifice,” said Chuck Collins, one of the study’s co-authors.

Billionaire wealth may well be grotesque, but a sensible way of looking at the underlying data would lead to the conclusion that America’s richest individuals lost wealth during the crisis, not gained it.

The study, picked up by media outlets including CNBC and Forbes , examines billionaires’ wealth between March 18 — the rough start date of the pandemic shutdown, when most federal and state economic restrictions were in place — and May 19. It relied on the Forbes’ billionaire list, which itself is built around stock-market performance.

Think about that in the market context. The pandemic did not start March 18 (nor, of course, had it ended on May 19), and certainly market concerns about the pandemic did not start March 18. Far from it.

A more logical way to think about whether billionaires got richer, or not, is to think about the performance from the Feb. 19 peak in the market, after which more investors began to get concerned by the novel virus. You then get to see who got richer even in the face of the crippling economic blow.

The real answer is, not many have. MarketWatch ran the numbers from the peak and, in the interest of time, only used the top 50 billionaires. MarketWatch also took the cheat of using the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.05%  for billionaires with private interests rather than Forbes’ more complex method. (Also, MarketWatch didn’t look at stock purchases during the month.)

Cumulatively, the top 50 billionaires lost $232 billion between the market’s peak and this Tuesday. If the remaining billionaires on the Forbes list lost wealth at the same roughly 12.5% rate that the top 50 experienced, that’s another $200 billion–plus wiped out.

Jeff Bezos of Amazon.com /zigman2/quotes/210331248/composite AMZN +0.55%  did get richer, by $13.5 billion. Bezos and Amazon have been big winners as people across the world rely on the service for an ever-increasing percentage of their consumption.

The Walton family, with their stakes in retail behemoth Walmart /zigman2/quotes/207374728/composite WMT +2.29% , also were winners. Jim, Alice and Rob Walton each made about $3 billion during the Feb. 19–to–May 19 span.

Tesla’s /zigman2/quotes/203558040/composite TSLA +10.78%  Elon Musk heads the losers list at $26 billion, and Microsoft /zigman2/quotes/207732364/composite MSFT -0.30%  co-founder Bill Gates saw his fortune sour by nearly $25 billion.

/zigman2/quotes/210599714/realtime
US : S&P US
3,185.04
+32.99 +1.05%
Volume: 2.41B
July 10, 2020 5:09p
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/zigman2/quotes/210331248/composite
US : U.S.: Nasdaq
$ 3,200.00
+17.37 +0.55%
Volume: 5.49M
July 10, 2020 4:00p
P/E Ratio
152.86
Dividend Yield
N/A
Market Cap
$1587.42 billion
Rev. per Employee
$359,671
loading...
/zigman2/quotes/207374728/composite
US : U.S.: NYSE
$ 130.68
+2.93 +2.29%
Volume: 14.75M
July 10, 2020 4:00p
P/E Ratio
24.85
Dividend Yield
1.65%
Market Cap
$361.78 billion
Rev. per Employee
$223,654
loading...
/zigman2/quotes/203558040/composite
US : U.S.: Nasdaq
$ 1,544.65
+150.37 +10.78%
Volume: 23.34M
July 10, 2020 4:00p
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
$258.60 billion
Rev. per Employee
$439,627
loading...
/zigman2/quotes/207732364/composite
US : U.S.: Nasdaq
$ 213.67
-0.65 -0.30%
Volume: 26.18M
July 10, 2020 4:00p
P/E Ratio
35.58
Dividend Yield
0.95%
Market Cap
$1625.28 billion
Rev. per Employee
$902,473
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Steve Goldstein is MarketWatch markets editor for Europe. Follow him on Twitter: @MKTWgoldstein.

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