After a study by business comparison platform Comparisun estimated that Amazon CEO Jeff Bezos would become a trillionaire by 2026, Twitter erupted with widespread condemnation.
Senator Elizabeth Warren tweeted saying, ”While Jeff Bezos is on track to become the world’s first trillionaire in the middle of a pandemic, Amazon is ending overtime pay for warehouse and delivery workers on the front lines. This is immoral.” Vermont Senator Bernie Sanders called Bezos’s increase of wealth an example of “unfettered capitalism”.
The news, coming as it did amid unparalleled economic devastation due to COVID-19, did not go down well, as the scale of the number of zeroes in a trillion dawned on many.
“If you made a dollar a second, it would be 31,709.8 years to be a trillionaire,” tweeted one user.
According to Forbes, as of writing, Bezos is worth $143.8 billion, down $393 million from the previous day—a drop of 0.27 per cent.
A loss of $393 million would be staggering for many, but not for a billionaire at that scale. Not even the $38 billion divorce settlement Bezos faced in 2019 was enough to drag down the trajectory of his net worth's increase. However, what led Bezos to wealth is also the spectacular rise of the company he founded—Amazon.
While Amazon grew exponentially, so too did its founders wealth. Bezos first became a billionaire in 1999 with $10.1 billion after Amazon’s initial public offering. However, his fortune after that saw a series of dips, reducing to $1.5 billion in 2002. From 2006 to 2007, it doubled, before dropping again a tad in 2008 and 2009.
From 2010, Bezos's net worth has increased by an average of 40 per cent each year according to Forbes World’s Billionaires Estimates. According to Comparisun, it grew by an average of 34 per cent over the last five years. Not even COVID-19 could dent this growth—amid the height of the global COVID-19 pandemic, while Amazon’s stock grew 5.4 per cent, Bezos’ worth increased by $24 billion according to Fortune.
The problem is that the forecast by Comparisun assumes that he will see a similar rate of growth over the next six years. If so, Bezos would become a trillionaire by 2026.
However, such growth is unlikely, if not impossible. It takes into account the average yearly growth seen over a five-year-period—one that also coincided with the longest bull run in US stock history.
With the US economy facing an unemployment rate similar to the Great Depression, a recession is a near certainty. Even so, Amazon’s stock has proven lockdown-proof so far: US retail sales dropped 16.4 per cent in April, while online sales went up 8.4 per cent. Even so, the future is too uncertain to expect the same rate of growth as before. And, with approximately $130 billion of Bezos’s net worth tied to Amazon according to Fox Business, the overwhelming bulk of his fortune will be reliant on the e-commerce giant’s continued rapid growth.
However, the study also looked at other candidates to become the world’s first trillionaire. Based on this, it saw Chinese real estate mogul Xi Jiayin on course to become one by 2027, AliBaba founder Jack Ma to reach the target by 2030, Tencent CEO Ma Huateng to become one by 2033 and Reliance Industries’ Mukesh Ambani to hit the mark the same year. For this to happen, e-commerce, real estate and the basket of industries Ambani is invested in must all see continuous growth in the future.
Since there is no certainty in business even without COVID-19, all such predictions need to be taken with a dose of salt.
There have been other predictions for who could become the first trillionaire too. Texas Senator Ted Cruz famously said that the world’s first trillionaire would be made in space, referring to the financial potential of asteroid-mining.
There could be contenders for the title of world’s richest man too. In 2017, former Hermitage Capital Management CEO Bill Browder estimated that Russian President Vladimir Putin had a net worth of $200 billion of “ill-gotten gains”.