Michael Bloomberg's Net Worth Stock Is Up
Michael Bloomberg’s net worth is $70,000,000,000. With all those zeros shown, the number seems to me to be more impressive than the shorthand version of $70 B. Forbes says his real-time net worth is $70 billion 2023. Early, in 2020, before the coronavirus crash, his net worth was over $61 billion. What happened?
The Early Days
Bloomberg’s grandfathers on both sides immigrated to the United States from Russia and what is now Belarus. His father was the bookkeeper for a milk company.
Bloomberg was a good student. He went to John Hopkins University for his undergraduate degree in electrical engineering and then went to Harvard where he got a Masters in Business Administration in 1966. By 1973, he was a general partner in the investment-banking firm on Wall Street called Salomon Brothers. He rose through the ranks to become the head of equity trading and in charge of system development.
Being Fired With $10 Million
In 1981, Solomon Brothers sold to the Phibro Corporation. This caused Bloomberg to lose his job; however, he also received the tidy sum of $10 million as the buy-out of his ownership interest as a partner in the firm.
The Billion-Dollar Idea
When Solomon Brothers sold, Bloomberg was already deeply involved in the internal computer system that he designed to give traders real-time information to improve their trading decisions. The saying that “information is King” was true for the Kings of Wall Street and Bloomberg realized that traders would pay handsomely for information that gave them an edge over their competitors.
Michael Bloomberg’s Net Worth Builds Up One Terminal At a Time
From his nest egg stake of $10 million, Bloomberg started Innovative Market Systems (IMS), now owned by Bloomberg LP. This was in the 1980s and there was no such thing as the commercialized version of the Internet.
Bloomberg’s marketing brilliance was to make his system useful, desirable, and special. There was a mystique about having a Bloomberg terminal as a trader and the buy-in was not cheap. Even with the freedom of the availability of information, which came about with the commercialization of the Internet, a Bloomberg data subscription still costs as much as $24,000 per year to lease. It is $20,000 for two or more subscriptions. The data feeds for a Bloomberg subscription now appear on multiple screens for the subscribers, which constantly flicker and change in real-time with the global markets.
From 1981 to now, the Bloomberg subscriber base grew from a few customers to an estimated 325,000 worldwide in 2015. By 2008, Michael Bloomberg’s net worth grew from $10 million to over $12 billion!
In both 2018 and 2019, the Bloomberg’s company made about $10 billion each year in revenues, outpacing its main competitor of Thomson Reuters by around $3 billion, so it is still a very powerful revenue-producing system.
Bloomberg is the majority owner of his private company, Bloomberg LP. Forbes reports that Michael Bloomberg’s net worth comes mostly from his 88% ownership interest in Bloomberg LP that provides the Bloomberg Terminal subscription service and produces Bloomberg News, Bloomberg TV, Bloomberg Radio, and everything else Bloomberg.
Now, do the math. Nearly 40 years now of collecting many billions from the “cash cow” of Bloomberg LP made Michael Bloomberg one of the wealthiest men in America and the world, with Michael Bloomberg’s net worth now around $55 billion. It took 15 years for Michael Bloomberg’s net worth to hit $10 million and then over the following 20 years as the CEO of Bloomberg LP he became a multi-billionaire.
How Bloomberg Terminals Survived the Advent Of the Internet
The exclusive arrangements that Bloomberg LP gets under contract with real-time data sources, still make the information relevant to traders and the subscription base of Bloomberg terminal continues to produce profits. In 2019, Bloomberg LP employed about 20,000 workers worldwide to capture and gather the news and sell these services to many others besides stock traders.
Mayor Bloomberg
After 20 years as the CEO of Bloomberg LP, Michael Bloomberg decided to enter politics. He left his position as CEO to run for mayor of New York City as the Republican candidate. He won in 2002 and was re-elected twice in 2005 and 2009. He started with low approval ratings and built up some success by helping solve the city’s financial problems.
He also implemented a controversial “stop and frisk” crime control program that was racist. He has since publicly apologized for doing this. In total, he was given a good score for his career as mayor over three terms.
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Bloomberg Compared To Politicians
Michael Bloomberg’s net worth qualifies him as an entrepreneur richest person in the world along with Jeff Bezos of Amazon, and he surpasses the other wealthiest entrepreneurs like Elon Musk of Tesla and SpaceX.
When comparing the richest entrepreneurs and what being wealthy means in America, Bloomberg is at the top of the heap of the richest politicians that make the barely-millionaire Bernie Sanders go crazy. As far as politicians net worth, Joe Biden is a pauper who does not come close to the top entrepreneur net worth of Bloomberg.
Michael Bloomberg’s Philanthropy
Besides using some of Michael Bloomberg‘s net worth for politics, he also does some massive giving away of money. He is one of the billionaires who signed The Giving Pledge that says he promises to give away at least half of his wealth through philanthropic efforts. Since signing the pledge, he has given away more than $8 billion. In 2015, he was the third-largest donor in America. The Giving Pledge is not a legal obligation, just a public promise made in good faith.
Through his Bloomberg Philanthropies Foundation., he gives money to many things that include public health programs, the arts, government innovation, the environment, and education.
The New York Times discovered that he was secretly giving between $5 million to $20 million a year to the Carnegie Corporation that in turn, distributed the funds to hundreds of charities in New York City. Thousands of charities have benefited from Bloomberg’s generosity, which deserves our praise.
Andrew Carnegie, who left behind a fortune earmarked for philanthropy, which is still giving money away a century later once said, “Those who die rich, die disgraced.” Michael Bloomberg says that he hopes to “bounce a check to his undertaker” after he gives his fortune away.
If you want to know more about Bloomberg’s philosophy, read his autobiography entitled Bloomberg by Bloomberg. It originally published in 1997 and the updated second edition came out in 2019. You can also sign up for a subscription to Bloomberg News online for $106 for three months (OMG! That's expensive.) and get notifications about the news articles about Bloomberg by Bloomberg News.
The expression of, “information wants to be free” may be true for some Internet sources, but not if it comes from a Bloomberg source.
Bloomberg LP
The majority of Bloomberg’s net worth comes from his ownership of Bloomberg LP. To determine the valuation of a private company there is an analytical technique called a capitalization rate also known as a “cap rate.” The cap rate is the ratio of the net operating income to the asset value. A “10 cap” is a terrific investment. It means that the cost of the asset is ten times the annual net operating income. This is the same as saying that it produces a 10% return on investment each year.
If Bloomberg LP is producing $10 billion in annual net operating income, as a ten cap it would have a value of $100 billion. It makes a little less than this but you get the idea. That would mean that Michael Bloomberg’s net worth of owning 88% of the company would be worth $88 billion.
The Real Estate Of Michael Bloomberg’s Net Worth
Bloomberg has a home on the Upper East Side of Manhattan in New York City. He owns more than a dozen luxury properties around the world. He owns the historical home of the author George Eliot in Cheyne Walk that is part of Chelsea, London. He has a Georgian-style mansion in South Hampton that is worth over $20 million. He owns houses in Bermuda, where he likes to vacation with his daughters.
Flying High On Michael Bloomberg’s Net Worth
Bloomberg has his pilot’s license and has owned at least six airplanes, which include three Dassault Falcon 900 private jets, a Pilatus PC-24, a Cessna 182 and a Beechcraft B300. He also has a couple of helicopters that he uses to fly around NYC that are an Airbus and an AW109 helicopter.
Conclusion
Michael Bloomberg certainly has the Midas touch when it comes to making money. He greedily sells valuable information at high prices to other greedy traders that make piles of money with the specialized data services that he provides. Nevertheless, he is very intelligent, wonderful at running a business, understands complex systems, and is very kind with his philanthropy.
He helps good causes such as universities, anti-tobacco campaigns, improving gun safety laws, and environmental efforts to help save our planet. He co-wrote the 2017 book Climate of Hope: How Cities, Businesses, and Citizens Can Save the Planet, which is very well written.
I think he might say, “Please don’t hate me just because I am a billionaire.” Certainly, he played the capitalist game extremely well, and he won big time. If you overlook his racism, misogynistic attitudes, and egotistical arrogance, he is probably a decent guy.
Of the billionaire class, he is one of the nicer ones. Warren Buffet, when asked about Michael Bloomberg, said, “I’d vote for him.” Warren is a nice guy. That I know for sure. When Bill and Melinda Gates started their foundation and then got Warren to join them, they then led the billionaire class to join them in The Giving Pledge, Michael Bloomberg was one of the first to also agree, so Warren’s assessment that he is a good guy, carries a lot of weight.