The Market Made These Brazilians Billionaires, Now the Crash Leaves Them With Millions

In one year, controlling executives of Brazilian listed companies had their net worth reduced by up to 90% due to the devaluation of their shares

Some of the tech companies that debuted on the Brazilian stock exchange in 2020 and 2021 have already lost about 90% of their market cap. Shutterstock
July 03, 2022 | 08:09 PM
Reading time: 4 min.

Bloomberg Línea — A year ago, the capital market in Brazil was experiencing an unprecedented moment of euphoria and wealth generation. In an environment of low-interest rates, below 6% per year, dozens of companies, many in the technology sector, went public on the Brazilian stock exchange, B3, making their founders and main shareholders billionaires overnight, crowning a successful trajectory of entrepreneurship.

As part of a wave of initial public offerings (IPOs) that began in 2020 and lasted a year and a half, at least 40 Brazilians joined the select club of billionaires last year, according to Forbes. There were 28 IPOs in 2020 and another 49 in the following year, not counting subsequent offerings of shares, the follow-ons.

But the turnaround of the Brazilian market, initially in June last year and more recently in April this year, has made many of the new IPO billionaires, millionaires again. From a record 130,776.27 points in June 2021 to its close last Friday (1) at 98,953.90 points, Ibovespa, the benchmark index of the Brazilian stock market, lost almost 25% of its value. In many cases, especially among Brazilian techs, the fall was even sharper, above 50%.

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Bloomberg Línea analyzed the evolution of the assets of the new billionaires by taking into account the shareholding that these entrepreneurs and executives have in their companies, which is generally the main source of wealth.

Israel Fernandes Salmen and Ofli Campos Guimarães, co-founders of Méliuz (CASH3), José Roberto Nogueira, founder of Brisanet (BRIT3), Pedro Paulo Chiamulera, founder of ClearSale (CLSA3), Gilberto Mautner, co-founder of Locaweb (LWSA3), and Pedro Albuquerque, co-founder of TC (TRAD3), are some of the cases of former billionaires, since their companies listed on B3 in 2020 or 2021 plummeted this year, to a greater or lesser extent along with the technology sector.

Even those who remained billionaires in Brazilian reais had a significant drop. Alexandre Ostrowiecki, the CEO and main shareholder of Multilaser (MULT3) had a patrimony of R$ 5.15 billion when the company made its IPO in July 2021. Today, the entrepreneur holds 39.54% of the company, which corresponds to R$1.3 billion about Multilaser’s current market capitalization of R$3.13 billion.

Following are the billionaires of 2021 who became millionaires in 2022:

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Israel Fernandes Salmen and Ofli Campos Guimarães

According to Forbes, in 2021, the fortunes of the top controllers of Méliuz were estimated at R$1.15 billion each. The founders of the cashback company, which went for an IPO in late 2020, saw their assets leap at the time, but are now racking up losses. According to information from Bloomberg, Salmen owns 17.51% of Méliuz, which now represents the equity of R$154 million.

Guimarães, on the other hand, who owns 10.45% of the shares, saw his assets fall to R$92 million.

Méliuz’s shares have already lost more than 90% of their value since the record a little less than a year ago.

José Roberto Nogueira and family

José Roberto Nogueira is the founder of Brisanet, Brazil’s largest independent fiber-optic internet provider. The company held its IPO in July last year, which raised the assets of Nogueira and his family to R$4.8 billion, according to Forbes data through June last year. The executive, who owns 33% of the company, now has a net worth of R$266 million. Brisanet’s shares have retreated about 87% since the time of the highest price, in July last year.

Pedro Paulo Chiamulera

ClearSale, a Brazilian software company of anti-fraud solutions, which has e-commerce sites as clients, went public in July 2021, moving R$ 1.3 billion. Pedro Paulo Chiamulera, founder of the company, reached a net worth of R$2.53 billion, according to Forbes data by June last year. Now, he has R$262 million from his 35.29% stake in the company. ClearSale shares accumulated a fall of approximately 85% since the peak about a year ago, after the debut.

Gilberto Mautner

Gilberto Mautner is one of the founding partners of Locaweb. The tech company’s IPO in early 2020 boosted Mautner’s net worth to R$1.23 billion, according to Forbes data through June 2021. Now, the 6.09% stake is equivalent to a fortune of R$ 205 million. Locaweb shares have retreated more than 80% since peaking in February 2021, but are still up on the IPO.

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Pedro Albuquerque Filho

Pedro Albuquerque is co-founder and CEO of TC (formerly TradersClub), a platform for retail and institutional investors to analyze financial information about companies on the stock exchange. With the IPO in July last year, Albuquerque became a billionaire, with assets of R$1.19 billion, according to data from Forbes in June 2021. Today, 26.60% of the company took his fortune to R$ 351 million. TC shares have accumulated a 64% drop since peaking at the end of July last year.

- Bloomberg Línea competes with Forbes in offering financial news and information.

- This article was updated to remove the name of Eduardo L’Hotellier, CEO of GetNinjas, who, although was impacted by the 86.08% drop in the company’s shares and holds 14.59% of GetNinjas, did not become a billionaire