Billionaires Of Two Different Generation: Warren Buffett & Mark Zuckerberg

  • May 28, 2020 AEST
  • Team Kalkine
Billionaires Of Two Different Generation: Warren Buffett & Mark Zuckerberg

Summary

  • Mark Zuckerberg has seen his worth top $80 billion, which puts him ahead of billionaire Warren Buffett.
  • While Warren Buffett undertook several sell-offs and portfolio rebalancing amidst COVID-19, Mark saw an upsurge in the FB stock value post announcement of Facebook Shops.
  • While market players are closely monitoring FB amidst growing virtual connectivity demand, investors are closely tracking moves of investing tycoon, Buffet.

Have you heard about rich people in the world? Jeff Bezos, Bill Gates, Mark Zuckerberg, Warren Buffett, Larry page are some of the renowned names that fall in the category of top 10 world’s richest people. Are you wondering what makes them standout? Well, there are several attributes such as management, vision, focus, business that differentiate each one and define their success story.

Warren Buffet, who became a billionaire at the age of 50, is an inspiration for many budding and established investors with his deep understanding of the market and different perspective towards investing. On the contrary, Mark Zuckerberg became a billionaire during his late 20s with the startup Facebook that has become a social media giant now.

Oracle of Omaha- Growth Story

We all know Warren Buffett as an American business tycoon, speaker and philanthropist, besides being tagged as the most significant investor of all times whose moves are traced, and they are an inspiration for many investors.

Popularly known as the Oracle of Omaha, he created Buffett Partnerships Limited in 1956 and went on to acquire Berkshire Hathaway, a textile manufacturing company. Post the acquisition, Buffet has been the CEO of the Berkshire Hathaway, and within two years post-acquisition of his initial stake in the company, he turned into the largest shareholder in 1960s.

Interestingly, he has pledged to give away over 99% of his fortune heading for philanthropist causes, and in 2019, he donated $3.6 billion, majority of it to Bill and Melinda Gates Foundation.

Notably, Warren Buffett’s real-time net worth (as on 27 May 2020) is $71.1 billion. Warren led Berkshire Hathaway is an American multinational conglomerate holding based in Omaha, Nebraska, United States, for several businesses and a powerhouse of investment. The company engages in a diverse range of products such as investments, insurance, aerospace, automotive, food processing, consumer products and retail.

During Q1 FY’20, the Company reported a massive net loss of ~ $50 billion, fall from ~$21 billion y-o-y due to COVID-19 outbreak. Consequently, the cash pile rose from $125 billion to $137.3 billion.

Under the umbrella of Berkshire Hathaway, there are several subsidiaries owned by the company such as GEICO, Dairy Queen, Benjamin Moore Paints, NetJets, and Duracell.

Warren and his investment team always aim to purchase bargain players with a long term perspective, possessing good management teams and sustainable competitive advantages.

The company has numerous operating companies under an umbrella the delivers sales and profits. It holds considerable positions in global giants such as Apple Inc. (NASDAQ: AAPL), Coca-Cola Company (NYSE: KO), American Express Company (NYSE: AXP), Wells Fargo & Company and Bank of America Corporation.

Did you read; Learn the art of investing during a bear market - Warren Buffet’s style

The tale of busy bee Warren in 2020

Buffet was lately in news for dumping all of his airline stocks worth $ 4 billion, stating grim outlook of the airline industry. While the industry is relying on government’s grants and loans, passenger numbers reaching pre-covid levels seem to be unlikely given the nature of health crisis.

The entire Airlines stakes of the company were sold off in the four largest US airlines. Consequently, the company has netted over $6 billion from stock sales in April. Reportedly, Mr Buffett is on a lookout for a huge acquisition as well.

Warren sold off its stake in Goldman Sachs Group Inc; with stakes falling from ~10 million shares to 1.9 million shares was reported. This has driven the American multinational investment bank and financial services company’s value down from about $ 2.8 billion to less than $ 300 million.

Warren has expanded the holding of PNC Financial Services Group Inc (NYSE: PNC) by 6.08% with investment of 526,930 shares, bringing total stakes to ~9.2 million shares. While, he sold off the smaller interests such as Travelers Cos with 312,379 shares and Phillips 66 with 227,436 shares.

GOOD READ- The Unstoppable Machine Mr. Buffett Delivers Pearls of Wisdom at the AGM

Social Networking Titan- Mark Zuckerberg

Mark Zuckerberg is the founder and manager of Facebook (NASDAQ: FB). The social giant allows users to connect with family and friends via mobile phones, personal computers, virtual reality headsets across the world.

Facebook has evolved from a Harvard social-networking website to a global social giant. The journey has been incredible from turning down of the acquisition by Yahoo in 2006 to acquiring various companies to add to its list.

Facebook expanded its family with the acquisition of Instagram in April 2009, WhatsApp in February 2014 and debut of Oculus in March 2016,

The reach and usability of Facebook pushed the company to file for listing. It’s initial public offering (IPO) in May 2012 raised $16 billion.

Mark announced plans of giving away of 99% of shares worth ~$45 billion to charity in 2015, as a part of new philanthropic effort with his wife. The scandal emerged in 2016 wherein Cambridge Analytica, a firm that worked on the campaign called Trump 2016 gained access to information on over 87 million Facebook users via quiz tools to influence their voting behaviour. Another scandal piled up in June 2018 of data sharing with device makers by Facebook.

The social giant has put its foot on the accelerator and is riding into the online shopping space via Facebook Shops, launched on 19 May 2020 in the US, to assist the businesses suffering due to COVID-19 via the establishment of a virtual marketplace for customers to access on Facebook and Instagram.

FB Financial performance (Quarter ending March 2020)

FB reported Q1’20 revenues of $17,737 million, an increase of 17% y-o-y. Income from operations was noted as $5,893 million, an increase of 78% y-o-y. While, FB witnessed a steep decrease in advertising revenue in March and reached $17,440 million in Q1 2020 from $20,736 in Q4 2019. The company’s diluted earnings per share stood at $1.71 in comparison to $0.85 in Q1’19.

On 27 May 2020, the shares of FB closed at $232.20, down 1.15% from its previous close with a market capitalisation of ~$669.28 billion.

The two contrasting personalities and businesses have made sure that they expand their wings by thriving to various opportunities that exist in this ever-changing environment.

Please Note: Currency is reported in the US Dollar unless stated otherwise.

 


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