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Comment by georgeplusplus | Hacker News Reader

Selling billions of dollars worth of stock is very different than logging on robinhood and trading hundreds of shares.

Making a list of richest people based on stocks is disingenuous because they will never be able to get that valuation if they sold it on the market due to the selling pressure such an event would exhibit from selling that much stock. Also gains in stocks are called unrealized wealth. It's not considered wealth until you decide to sell.

Recently Elon sold stock to shore up funds to buy Twitter. Doing so he tanked the price of TSLA.

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If this is true, how would a founder or large shareholder ever retire (or even unexpectedly die and have their estate liquidated) without immediately killing the company they are a majority shareholder in? It seems like this must have happened at some point.

If your net worth is in the billions then extracting few millions for retirement is not a problem.

That makes sense. But even if you’re one of the world’s richest people and decide for some reason to retire just on the savings of a FAANG engineer, you still eventually die and your assets must be sold or passed on to others. Someone is going to cash out.

I just don’t understand how once you reach a certain level of wealth you are functionally locked out of ever accessing it except on paper. Someone must have kept their wealth or cashed out (one way or the other) at some point. It feels like, if true, no business would ever exist more than 30 years but clearly there are many businesses that have.

The shares get dispersed to the broader family, children, grandchildren etc.

Typically at those levels of wealth there is a “family office” which is just a word for “hedge fund” that’s only clients are the family. Like any hedge fund they can use those shares as parts of lots deals to diversify, manage risk and pull out cash.

Sometimes it’s even simpler, dividends can provide a significant cash flow for large shareholders.

In any case, it would be extremely strange for someone to get very wealthy and then hold most of their portfolio in cash.

Agreed it would be strange, more wondering about how “making a list of richest people based on stocks is disingenuous because they will never be able to get that valuation if they sold it on the market”

> If this is true, how would a founder or large shareholder ever retire

Bezos doesn't need to sell 100% of his AMZN to retire. Just a few points would be enough to live a lavish lifestyle.

This is a real issue though, and the same problem you're describing exists in the inverse. How was Elon able to buy 100% of the shares of Twitter without prices going to infinity? You go to private buyers and sell large blocks at a discount (or buy large blocks at a premium) to the current market value. Drag-along clauses help ensure there aren't meaningful stragglers once start approaching 100%.

We can actually test this!

Mackenzie Scott got $36B of Amazon stock and has sold $8B.

Large shareholders aren't very large. They dilute their shares over time. The Google guys have a tiny amount of financial shares of Google, while retaining voting shares.

The Twitter owners recently sold Twitter at >100% of its nominal value as measured both at the time of the offer and the week before closing. Twitter's value didn't crash when the sale was announced.

Somewhat unrelated but where does this bizarre tendency on this site to call famous tech people by just their first names even if one doesn't know them personally come from? "Elon", "Jeff", "Mark" and etc... Normally, unless you personally know some famous person, it sounds downright odd to refer to them as if they were a beer buddy, neighbor or colleague. (assuming here that you and many others who comment here don't actually know Elon Musk personally).

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