THE CHANGING FORTUNES OF THE WORLD’S RICHEST

The super rich are a whole lot richer than they were two months ago. Twenty five of the wealthiest people on Forbes’ list of the world’s billionaires are worth a whopping $255 billion more than when the U.S. stock market hit a mid-pandemic low on March 23. 

Together these 25 folks–Forbes looked at just those on the list with fortunes tied to public stocks–are worth nearly $1.5 trillion, which is about 16% of the total wealth held by the world’s billionaires.

Facebook CEO Mark Zuckerberg is the biggest dollar gainer among this rarified group. Facebook shares surged nearly 60% over the past two months, hitting a record high on Friday May 22.  Investors responded positively to the Wednesday debut of Shops, Facebook’s effort to host digital storefronts for small business owners. Zuckerberg, now worth $86.5 billion, has become the fourth-richest person in the world, up from the No. 7 richest on Forbes’ 2020 list of the World’s Billionaires, published in early April. The 36-year-old is now richer than Warren Buffett, Inditex founder Amancio Ortega and Oracle cofounder Larry Ellison.

The second-largest gainer in dollar terms is also the world’s richest man, Amazon founder and CEO Jeff Bezos. Shares of the ecommerce giant have continued on a tear amid increased demand since coronavirus shuttered physical retailers. Amazon stock is up 29% since March 23. As of the end of the day Friday, Bezos was worth $146.9 billion, up $30 billion and 26% since March 23. 

The biggest percentage gainer is Colin Zheng Huang, the founder of China’s second largest online marketplace (behind Alibaba), Pinduoduo. Boosted by the firm’s social shopping model, in which users share purchases with friends and family, and an aggressive campaign offering subsidized deals to consumers, Pinduoduo’s shares have nearly doubled since March 23, and Huang, its 40-year-old founder and CEO, has added $17.9 billion to his fortune; he’s now China’s third-richest person, worth $35.6 billion.

Another notable gainer: Mukesh Ambani, who became Asia’s richest person in April after Facebook announced a $5.7 billion investment into Mumbai-based Reliance Jio, a telecom subsidiary of the sprawling conglomerate founded by Ambani’s late father. The company has since raised loads more, including $1.5 billion from private equity giant KKR on Friday and $750 million from investment firm Silver Lake earlier this month. All told, the firm has raked in $10 billion of fresh capital in less than one month. Ambani is now worth $52.7 billion, up nearly $20 billion since the market trough. 

Billionaires with net worths tied to stakes in technology companies have led the way for gains amid the pandemic. The tech-heavy Nasdaq composite index turned positive for the year earlier this month, and it’s up 37% since March 23. The S&P 500 and Dow Jones, meanwhile, are up about 31% each–still down roughly 10% and 15% for the year, respectively. 

Not a single top 25 fortune has fallen since March 23. The fortunes of Jim, Alice and Robert Walton, for example, grew the least percentage-wise, but they’re still up $3.6 billion each. Walmart shares hit an all-time high in mid-April after the first round of stimulus checks made their way to American bank accounts, and they’ve managed to stay near their peak. On Tuesday, the firm reported quarterly revenue that surged almost 10% to $134.6 billion, boosted by a 74% increase in online sales. Combined, the three billionaire Walmart heirs are worth close to $165 billion.

The figures stand in stark contrast to those at the other end of the wealth spectrum. In the U.S. total unemployment claims have risen to 39 million since mid-March, affecting about a quarter of the U.S. labor force.

HERE’S HOW MUCH THE WORLD’S 25 RICHEST BILLIONAIRES HAVE GAINED OVER THE PAST TWO MONTHS.

The net worth change is from Monday, March 23, to Friday, May 22.

1 | JEFF BEZOS

NET WORTH | $146.9 BILLION, UP $29.9 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | AMAZON

2 | BILL GATES

NET WORTH | $106.5 BILLION, UP $11.9 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | MICROSOFT

3 | BERNARD ARNAULT

NET WORTH | $94.1 BILLION, UP $12.8 BILLION

COUNTRY | FRANCE

SOURCE OF WEALTH | LVMH

4 | MARK ZUCKERBERG

NET WORTH | $86.5 BILLION, UP $31.4 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | FACEBOOK

5 | WARREN BUFFETT

NET WORTH | $69.2 BILLION, UP $6 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | BERKSHIRE HATHAWAY

6 | LARRY ELLISON

NET WORTH | $66.4 BILLION, UP $10.4 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | SOFTWARE

7 | STEVE BALLMER

NET WORTH | $65.4 BILLION, UP $14 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | MICROSOFT

8 | LARRY PAGE

NET WORTH | $63.6 BILLION, UP $14.2 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | GOOGLE

9 | SERGEY BRIN

NET WORTH | $61.3 BILLION, UP $13.7 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | GOOGLE

10 | AMANCIO ORTEGA

NET WORTH | $60.5 BILLION, UP $5.2 BILLION

COUNTRY | SPAIN

SOURCE OF WEALTH | ZARA

11 | JIM WALTON

NET WORTH | $55.2 BILLION, UP $3.6 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | WALMART

12 | ALICE WALTON

NET WORTH | $55 BILLION, UP $3.6 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | WALMART

13 | ROB WALTON

NET WORTH | $54.8 BILLION, UP $3.6 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | WALMART

14 | FRANCOISE BETTENCOURT MEYERS

NET WORTH | $54.2 BILLION, UP $6.4 BILLION

COUNTRY | FRANCE

SOURCE OF WEALTH | L’OREAL

15 | MUKESH AMBANI

NET WORTH | $52.7 BILLION, UP $19.9 BILLION

COUNTRY | INDIA

SOURCE OF WEALTH | OIL & GAS, PETROCHEMICALS

16 | CARLOS SLIM HELU

NET WORTH | $51.2 BILLION, UP $4.2 BILLION

COUNTRY | MEXICO

SOURCE OF WEALTH | TELECOM

17 | MACKENZIE BEZOS

NET WORTH | $47.8 BILLION, UP $10.4 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | AMAZON

18 | MA HUATENG

NET WORTH | $46.4 BILLION, UP $6.8 BILLION

COUNTRY | CHINA

SOURCE OF WEALTH | INTERNET MEDIA

19 | JACK MA
NET WORTH | $41.3 BILLION, UP $3 BILLION
COUNTRY | CHINA
SOURCE OF WEALTH | E-COMMERCE

20 | PHIL KNIGHT
NET WORTH | $37.7 BILLION, UP $9.9 BILLION
COUNTRY | UNITED STATES
SOURCE OF WEALTH | NIKE

21 | ELON MUSK

NET WORTH | $36.7 BILLION, UP $9.5 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | TESLA MOTORS, SPACEX

22 | COLIN ZHENG HUANG

NET WORTH | $35.6 BILLION, UP $17.9 BILLION

COUNTRY | CHINA

SOURCE OF WEALTH | E-COMMERCE

23 | FRANCOIS PINAULT

NET WORTH | $31.8 BILLION, UP $2.1 BILLION

COUNTRY | FRANCE

SOURCE OF WEALTH | LUXURY GOODS

24 | SHELDON ADELSON

NET WORTH | $30.7 BILLION, UP $1.4 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | CASINOS

25 | MICHAEL DELL

NET WORTH | $28.3 BILLION, UP $3.5 BILLION

COUNTRY | UNITED STATES

SOURCE OF WEALTH | DELL COMPUTERS

–Jonathan Ponciano, Forbes Staff, Billionaires

It’s everyone’s dream to get paid to do nothing. Bitcoin miner Layer1 is turning that dream into reality — having figured out how to make money even when its machines are turned off. 

Layer1 is a cryptocurrency startup backed by the likes of billionaire Peter Thiel. In recent months, out in the hardscrabble land of west Texas, the company has been busy erecting steel boxes (think shipping containers) stuffed chockablock with high-end processors submerged inside cooling baths of mineral oil. Why west Texas? Beause thanks to a glut of natural gas and a forest of wind turbines, power there is among the cheapest in the world — which is what you need for crypto. 

“Mining Bitcoin is about converting electricity into money,” says Alex Liegl, CEO and co-founder. By this fall Layer1 will have dozens of these boxes churning around the clock to transform 100 megawatts into a stream of Bitcoin. Liegl says their average cost of production is about $1,000 per coin — equating to a 90% profit margin at current BTC price of $9,100. 

So it’s odd how excited Liegl is about the prospect of having to shut down his Bitcoin miners this summer. 

Already this year west Texas has seen a string of 100-degree days. But the real heat and humidity don’t hit until August, which is when the Texas power grid strains under the load of every air conditioning unit in the state going full blast. During an intense week in 2019, wholesale electricity prices in the grid region managed by the Electricity Reliability Council of Texas (ERCOT) soared from about $120 per megawatthour to peak out at $9,000 per mwh. It was only the third time in history that Texas power hit that level. And although the peak pricing only lasted an hour or so, that’s enough to generate big profits. Analyst Hugh Wynne at research outfit SSR figures that Texas power generators make about 15% of annual revenues during the peak 1% of hours (whereas in more temperate California grid generators only get 3% of revs from the top 1%).

Turns out that running a phalanx of Bitcoin miners is a great way to arbitrage those peaks. Layer1 has entered into so-called “demand response” contracts whereby at a minute’s notice they will shut down all their machines and instead allow their 100 mw load to flow onto the grid. “We act as an insurance underwriter for the energy grid,” says Liegl, 27. “If there is an insufficiency of supply we can shut down.” The best part, they get paid whether a grid emergeny occurs or not. Just for their willingness to shut in Bitcoin production, Layer1 collects an annual premium equating to $19 per megawatthour of their expected power demand — or about $17 million. Given Layer1’s roughly $25 per mwh long-term contracted costs, this gets their all-in power price down 75% to less than 1 cent per kwh (just 10% of what residential customers pay). 

It may seem like grid operators are paying Layer1 a lot for something that might not even happen, especially with coronavirus reducing electricity demand, but it makes total sense, says Ed Hirs, a lecturer in energy economics at the University of Houston and research fellow at consultancy BDO: “It’s a lot cheaper option than building a whole new power plant or battery system just to keep it on standby.” 

And although this may be a new concept for cryptocurrency miners, it’s been done before. Two decades ago industrialist Charles Hurwitz bought up power-hogging aluminum smelters in the Pacific Northwest and made more money reselling electricity than making metal. “It used to be called load management,” says Dan Delurey, a consultant with Wedgemere Group. “In old commercial buildings you might still find telephone wires connected to air conditioning systems so that grid operators could send a signal to shut off.” More recently we’ve seen companies install radio-based devices to control hot water heaters and lighting systems. Indeed, grid management is a hot enough area that in 2017 Italy’s power giant Enel bought Boston-based Enernoc for $250 million and Itron ITRI bought Comverge for $100 million. What’s emerged are entities, like Layer1, that Delurey calls the “prosumer” — producing consumer. 

As for Layer1, Liegl says his next step is to vertically integrate into financial products, including Bitcoin derivatives and more. “We are building an in-house energy trading division to leverage this into being a virtual power plant.” 

His message to any pikers still trying to mine cryptocurrencies from their bedroom PC or even via cloud services: “I can’t think of something more irrational at this point. It’s like if I wanted to dig a hole in my backyard and try to get oil out of the ground.” 

–Christopher Helman, Forbes Staff, Energy

TOPLINE Former Facebook moderators will receive at least $1,000 each after Facebook agreed to pay $52 million to settle a lawsuit over allegedly failing to protect moderators being exposed to harmful content online.

KEY FACTS

• Moderators were exposed to the worst types of content online including terrorism, pedophilia and animal abuse. They were hired by Facebook through third-party firms.

• The settlement covers more than 11,000 current and former moderators across California, Arizona, Texas and Florida. It was filed at San Mateo County Superior Court on Friday.

• Plaintiffs who have been diagnosed with a mental illness, including PTSD, qualify for additional compensation of up to $50,000.

• The social media giant says it will change its policies in response to the case, and introduce compulsory group counseling sessions for moderators, while third-party firms will be required to step up support for moderators’ mental health.

CRUCIAL COMMENT

Lawyer Steve Williams, representing the plaintiffs, told The Guardian: “The harm that can be suffered from this work is real and severe. So the fact that we got some real, meaningful relief going forward just feels really good.”

KEY BACKGROUND

Facebook was sued in September 2018 by former content moderator Selena Scola, who developed PTSD after nine months in the job, thanks to regular exposure to images of rape and murder. The scale of the mental toll on moderators was exposed by The Verge last year. The outlet reported that some Facebook content moderators working for IT firm Cognizant CTSH in Arizona had developed fringe views after exposure to extreme right-wing and conspiracy theorist content, while some had developed PTSD. To cope, some moderators at the firm smoked weed to numb their emotions, while being paid just $28,800 a year. A Guardian report last year found that moderators for Facebook based in Berlin were becoming addicted to extreme content, were overworked and paid little. 

– Isabel Togoh, Forbes Staff, Business