Entrepreneurs with the biggest losses in 2016
Read more about these six billionaires who lost impressive fortunes this year.
Published on 14 October 2016
Lost: US$779 million
On September 1, a rocket owned by SpaceX, the aerospace manufacturer and space transport services company founded by Musk, exploded. But the rocket wasn’t the only thing that went up in flames. He weathered a drastic plunge in stock prices of two of his other companies, Tesla Motors and SolarCity, on the back of a poor reception to a proposed merger between the two.
The billionaire, who famously does not draw a salary but instead has locked up most of his estimated US$12 billion fortune, also put up a significant amount of his stock as collateral to borrow money for personal expenses, bringing his loss to US$779 million in a single day.
Lost: US$4.5 billion
Once the poster girl for female entrepreneurs in Silicon Valley, Elizabeth Holmes, the now-disgraced founder and CEO of Theranos is now worth next to nothing. Just one year earlier, the privately-owned blood testing company was valued at US$9 billion and Holmes was estimated to be worth US$4.5 billion based on her 50 per cent stake in the company.
But a 2015 investigative report by the Wall Street Journal made a strong case that Theranos had exaggerated the reliability of its tests and this was followed up by multiple investigations by various federal agencies. This year, the Centers for Medicare and Medicaid Services banned her from owning or operating a diagnostic laboratory for two years.
In the face of this scandal, Theranos was revalued to be worth about US$800 million based on the money it has raised, and Holmes, who merely owns common stock in the company, is worth next to nothing today.
Lost: US$6 billion
If there is anyone who can make a US$6 billion loss seem manageable, it would be Li, the chairman of CK Hutchinson Holdings. It’s been a challenging year for the Hong Kong tycoon, with Brexit causing his wealth to decrease by about 4 per cent. He was in a particularly vulnerable position as his company owns ports, retail groups and mobile phone networks in Europe.
Still, the majority of his loss over the past year came from the tumbling shares of Canadian oil company Husky Energy, which lost about half their value, according to Forbes. Nevertheless, even though Li’s net worth of US$31.9 billion is at its lowest in four years, he still has enough billions to his name to remain Hong Kong’s richest man and stands as the Number 17 richest man in the world.
Lost: US$1.2 billion
Samsung, one of Apple’s key competitors in the smartphone market, suffered a huge setback when it discovered that batteries in one of its bestselling phones, the Galaxy Note 7, had a high risk of exploding when being charged. In just two days, Samsung’s shares dipped by 11 per cent and Lee, chairman of Samsung Electronics, lost an eye watering US$1.2 billion.
Unfortunately, the loss continues to grow with recent data from Samsung Electronics Co Ltd showing that it is expected to take a hit to its operating profit of about US$3 billion over the next two quarters due to the discontinuation of its fire-prone smartphone.
Lost: US$27.1 billion
It’s just not been a good year for those in the telecommunications business. Once the richest man in the world, he has been seeing his fortune decline thanks to new regulations in Mexico, a sliding Mexican peso and weaker economies in Latin America. These developments have led to a dramatic loss of US$27.1 billion to Mr Slim’s net worth, making him one of the biggest losers this year.
Despite this setback, he still has US$47.5 billion in his coffers, which means he keeps his ranking as the richest man in Mexico and is securely among the richest men in the world, so there’s no need to feel too sorry for his lost fortune.
Lost: US$1.14 billion
The chairman of Beijing Kunlun Tech, one of China’s largest web game developers and operators and a majority shareholder in all-male dating app Grindr, has found out the hard way that love may be the most expensive investment of all.
A Beijing court has just awarded his wife, Li Qiong, about 300 million company shares worth US$1.14 billion. Although the court did not explain the reason for this action, rumour is that the duo are getting a divorce, making this one of the most expensive divorce settlements in China to date.