Russian billionaires are losing everything due to the invasion of Ukraine

While the Russian president Putin thinks he’s doing fine, with his campaign into Ukraine, Russian billionaires are getting absolutely wrecked, by the sanctions, from the international community. The situation has become so extreme, that some of them literally went to bed as billionaire, to then wake up the next day, as a poor millionaire.

Now for us mere mortals, it might not seem that bad, to go from $1 billion to $200 million, since you can still live a very comfortable life, however, there are some additional problems, that will make this $200 million, seem like pocket change and these loses, are going to completely bankrupt, quite a few of them. So let’s look at the main guy Oleg Tinkov, because, before the war started, Tinkov was worth around $5 billion dollars, most of which he made, by taking Tinkoff Bank public.

Tinkoff group stock, yahoo finance

However, as soon as Poetin declared to invade Ukraine, the shares of the Tinkoff Group, fell from around $49 dollars, to $3.19, which is a 93% decline and this entire fortune evaporated, in just 6 days. However, this decline is actually much worse, when you consider that before the troop build up, along the Ukrainian border, the Thinkoff group was actually valued at over $23 billion dollars, with a share price of $116, so this would make the total decline well over 97%.

Yandex stock price, yahoo finance

This is an insane level of wealth destruction and Oleg Tinkoff isn’t even the only one. Dozens of Russian billionaires are experiencing the exact same thing. Take Arkady for instance, the founder of the largest Russian search engine Yandex, he went from $2.6 billion last year, to around $580 million right now.

Now there are some Russians, that have lost considerably more wealth, due to the invasion, such as Vagit Alekperov, who is the founder of LUKOIL, the largest independent oil producer in Russia, which has lost over 40% of its value and Alekperov himself, has lost around $16 billion, across all of his assets. However, since his $21 billion dollar wealth, only fell to around $5 billion, he can still go to bed as a billionaire, for the time being.

Putin and Alekperov

Now the reason, why we focus on the billionaires, that have become millionaires, is because of what happened earlier this year, to Archegos Capital and the man responsible for the bankruptcy, Bill Hwang. You see, when you become rich, you get access to private banking at your local bank and when you become wealthy, you get access to private banking, at the biggest investment banks in the world.

Many billionaires take advantage of this, by leveraging their assets or stock portfolio to get access to credit lines or loans, which they then use, to develop real estate or speculate with, on the stock market. Now Bill Hwang took this to a whole another level and seriously over leveraged himself by gambling with his investments, however, even when you do this correctly, a 93% drop in your assets or stock portfolio, is more than enough, for the banks to start closing your credit lines and start asking for their money back and this is where the true problem lies. Because, if any of these billionaires have credit lines or loans, in the range of $200 to $500 million, which would be a perfectly normal amount, when you have a net worth of $2 or $5 billion, then they are in big trouble.

They will have to start liquidating assets, like houses or super yachts, to pay back the banks and that might be easier said than done, since several countries have already started seizing, several super yachts and the UK is now also looking at seizing houses, in London’s famous billionaires row. This elite strip of real estate has been bought and developed for years, by very wealthy Russians and they have invested huge amounts here, in order to protect their wealth against a falling Ruble and a crazy President, since as soon as you fall out of favour in Russia, your assets can easily be seized and you can find your self in a Russia prison.

Another bit of bad news for the Russian billionaires, is that the loses are far from over, since the Russian stock market has been closed by the central bank, to prevent an even bigger fall. So when the stock market eventually opens up, the drop in value, can simply continue and their domestic assets, that are now protected from falling, will begin to fall as well.

The Moscow stock market index, it cannot go any lower as Moscow stock exchange has been closed since the beginning of the occupation.

It seems that Russian billionaires are losing the billions of dollars they stole from the Russian people. How sad.. So, unfortunately for the Russian elite, the hits are coming from all directions and trying to remain rich, is going to be very difficult, especially if you only have $100 million dollars and one crazy dictator who controls you as a puppet.