EXPLAINED | How an $18.53 Drop in Nvidia Shares Cut $15 Billion From Jensen Huang’s Fortune

Jensen Huang was worth an estimated $150.9 billion when Wall Street closed on November 5. That was $15.1 billion less than a day earlier, enough to drop Nvidia’s co-founder and chief executive from ninth to 13th on the Bloomberg Billionaires Index. Nvidia shares had fallen 9.3 per cent. A September filing shows how a move of less than $20 a share could do that much damage to one fortune.

Who took the biggest hits?

Among the losses Bloomberg reported, Musk was down $79.7 billion, Huang $15.1 billion and Ellison $10.1 billion. Their combined $104.9 billion decline was equivalent to about 57 per cent of the $185 billion net loss across the 500 people on Bloomberg’s index that day.

Their fortunes are tied to different parts of the AI boom. Nvidia sells the chips that do the computing. Oracle rents computing power through its cloud business. Musk’s holdings include Tesla and SpaceX, whose shares both fell on Thursday.

How does an $18.53 drop turn into $15 billion?

Multiply the price drop by the shares. Nvidia closed at $200.13 on November 4 and $181.60 on November 5. Huang’s September filing with the US Securities and Exchange Commission listed about 811.5 million shares held directly or through trusts and other entities. Apply the $18.53 drop to that share count and the decline comes to about $15.0 billion.

That comes close to Bloomberg’s $15.1 billion estimate. The calculation uses Huang’s September share count. Bloomberg estimates his whole fortune, which also includes cash assets.

Did $15 billion leave Huang’s bank account?

The loss was in the estimated value of his holdings. If you own 100 shares and the price falls from ₹100 to ₹90, you still own 100 shares. They’re now worth ₹1,000 less at the quoted price. Selling would lock in whatever price you actually receive. For a founder trying to sell hundreds of millions of shares, the selling itself could push the price lower.

Bloomberg updates the value of listed stakes using closing prices. If Nvidia’s shares recover, the estimated value of Huang’s stake rises with them.

When can a paper loss bite?

When the shares are backing a loan. A borrower can pledge stock as security. If its price falls, the lender has less value backing the same debt. The loan terms determine whether the borrower has to put up more security or repay part of the loan.

Oracle disclosed that Ellison had pledged 413 million shares for personal borrowing as of September 21. The company said those shares backed personal term loans and its board believed he could repay without resorting to the pledged stock. Whether Thursday’s sell-off prompted any lender to act remains unverified.

Is the $185 billion part of the $2.5 trillion Nasdaq wipeout?

Some of it is. Reuters’ $2.5 trillion figure measures the fall in the combined market value of companies in the Nasdaq 100. Bloomberg’s $185 billion measures the change in the fortunes of 500 people, including their holdings in some of those companies. Adding the two would count some losses twice.

Reuters reported that investors were weighing whether the US midterm results could slow data-centre construction. They were already worried about the cost of financing those projects and how much the spending would earn back. If projects move more slowly, customers could buy chips and rent computing power later than investors had expected.

Could an Indian fund feel the same sell-off?

Yes. Nvidia made up 8.36 per cent of the Motilal Oswal Nasdaq 100 ETF’s net assets as of September 30. A fall in Nvidia’s shares can pull down the value of that holding. The fund’s overall return in rupees also depends on its other investments and the dollar-rupee exchange rate.

What can Nvidia’s November 17 results tell us?

Nvidia is due to discuss its quarterly results on November 17 in the US. Investors will want to know what the company expects to sell in the coming quarter, and whether its biggest customers are sticking to their spending plans. The sell-off showed how quickly investors changed their expectations. Nvidia’s outlook will give them a chance to check those expectations against what customers are ordering.