The Extraordinary Rise and Fall of the Covid Billionaires

Think back: There really was a time when no one wore sweatpants on Zoom calls with clients. Or even dreamed about buying a used BMW on Carvana.com. Or had to remember which shot — Pfizer, the first time? Moderna, the second? — they got.

In a little less than three years, Covid-19 has changed everything: how we live, work and play, educate our kids. And, it turns out, how vast wealth can be made — and lost — faster than anyone might’ve thought possible.

The roll-out of Moderna Inc.’s vaccine propelled scientist Stephane Bancel’s net worth to $15 billion as the shares soared almost 2,400%. Eric Yuan, denied a US visa eight times before moving from China, watched his fortune hit $29 billion as Zoom Video Communications Inc. became the world’s go-to video-conferencing tool. And the father-son duo behind online used-car seller Carvana Co. amassed a $32 billion fortune at the peak.

The men belong to an exclusive club of 58 billionaires whose wealth multiplied at an eye-popping pace thanks to changes brought about by Covid and cheap money, only to plummet even quicker.

Their rise and subsequent slump were sharper than the other 131 members of the Bloomberg Billionaires Index whose net worth more than doubled, but wasn’t as reliant on how Covid altered lives across the globe.

Together, they’re a monument to these strange financial times that both spawned extraordinary fortunes and plunged legions into extreme poverty.

To Kim Forrest, founder of investment firm Bokeh Capital Partners in Pittsburgh, the exuberance around companies benefiting from stay-at-home orders felt like a replay of what she calls the foolishness of the tech bubble two decades ago, when money flowed to almost anything with dot-com in its name.

“They were filling a niche that desperately needed to be solved, but it wasn’t a long-run kind of thing,” said Forrest. “Investors are looking for growth and there is no more growth to be had in work-from-home.”

The comparison group of other billionaires includes many beneficiaries of the fiscal aid and rock-bottom interest rates that followed the global outbreak: Tesla Inc.’s Elon Musk, who became the world’s richest person; Masayoshi Son, whose leveraged tech bets only went up; and Sam Bankman-Fried, the 30-year-old crypto mogul who rode a rally in everything from Bitcoin to Bored Apes.

None of these ultra-wealthy entrepreneurs has proven immune to a collective effort among global central banks to hike interest rates to tame rampant inflation. The MSCI All-Country World Index of global shares is down about 25% this year.

However, the new fortunes most closely linked to the pandemic have crumbled at a breathtaking pace, rivaled only by other once-in-a-generation episodes like the 2008 financial crisis and the Great Depression.

Out of the 58 Covid billionaires, 26 have citizenships in Asia, 18 hail from the US and Canada, and 10 from Europe. Just two are female: Falguni Nayar — founder of India’s first woman-led unicorn to go public, beauty retailer Nykaa — and Denise Coates, the co-CEO and biggest shareholder of UK-based Bet365 Group Ltd.

Their businesses broadly fall into seven categories. Lifestyle changes due to social-distancing measures during the pandemic played a big role: More than half of the tycoons are associated with stay-at-home habits, remote work or e-commerce. One-third are linked to companies in the pharma and health-care world, producing everything from vaccines to ventilators.

“The amount of economic good those people did is tremendous,” said Paige Ouimet, a finance professor at the University of North Carolina, particularly singling out the vaccine innovators. “So absolutely, they should have been rewarded.”

While the Covid billionaires’ average net worth is still up substantially compared to before the pandemic, the outsized gains have crumbled away. Wealth has retreated dramatically in each subgroup, led by e-commerce. Assets there have fallen by an average of 58% from their peak as investor interest — and speculative bets — have cooled and many bored-at-home people have resumed their pre-Covid lives.

The rise and decline of these fabulous fortunes took place against a bleak backdrop. As the Covid-fueled everything rally sent asset prices into the stratosphere, workers across the globe further down on the economic ladder lost jobs, businesses and savings.

There are about 97 million more people living on less than $1.90 a day because of the pandemic, according to a World Bank report.

Pandemic aid packages gave some relief, but didn’t make up for all that was lost. And this year, just as the worst of Covid seems to have receded, new dark clouds bank on the horizon: soaring prices of food and energy, higher interest rates and the looming risk of a global recession.

Even in rich countries, campaigners warn a burgeoning cost-of-living crisis means lower-income households face the choice between heating and eating this winter. And in poorer nations, the pandemic has undone years of efforts to lift millions out of poverty, with high inflation and surging public debt hampering those countries’ ability to reverse that development, the World Bank said.

As the outlook for many ordinary families gets bleaker, support behind initiatives to tax rising corporate and personal wealth is growing. Last year, finance leaders from the Group of Seven countries backed a  global minimum tax rate on corporate income.

In recent weeks, Spain has introduced a new levy on those with more than $2.9 million in assets, while the freshly elected Colombian president unveiled a goal to drive up taxes on the wealthiest by about 200%. In a further sign of the shifting mood, the new UK government recently had to retreat from its plans to cut income tax for the rich after the idea sparked a rebellion among its own parliamentarians.

Such moves might not go far enough for campaigners for higher wealth levies like Max Lawson, head of inequality policy and advocacy at Oxfam International, who’s warned that without action Covid risks turning the gap between rich and poor into an unbridgeable chasm. But at least politicians are now paying attention.

“We’ve seen both extreme wealth and extreme poverty shoot up at the same time,” Lawson said. “I don’t think enough people have clocked how off the charts it’s been.”

About the data: A Bloomberg News analysis of the Bloomberg Billionaires Index, which tracks the world’s 500 richest individuals, identified 189 people whose wealth more than doubled at one point since Dec. 31, 2019, when the World Health Organization was informed of an unknown-caused pneumonia in Wuhan, China.

Of these, we identified 58 made or grew their fortunes through ventures that were directly boosted by the pandemic. We called them “Covid billionaires” and classified them into seven categories based on their line of business, such as remote work, vaccines and e-commerce. As a group, they outperformed their peers and increased their wealth at a much quicker pace, until late 2021.

The analysis doesn’t include billionaires who have died. Data current as of Sept. 30, 2022.