New York (CNN/Money) -
Is Bill Gates still the world's wealthiest person?
On Sunday, April 4, the Reuters news service published a story crediting IKEA founder Ingvar Kamprad with a fortune of more than $53 billion, exceeding Gates's $46.6 billion net worth.
The story was based on a Swedish TV news report, which in turn cited a soon-to-be-released article from Veckans Affarer, a Stockholm-based business weekly.
By Monday, April 5, the piece had been called into question. IKEA spokeswoman Marianne Barner stated strongly that the report was just wrong, according to the Associated Press.
She contended that the magazine simply estimated the value of the entire company and assigned it all to Kamprad. But the founder hasn't fully owned IKEA since 1982, when he donated ownership to the Dutch Stichting INGKA Foundation.
So in IKEA's corporate eyes, Kamprad doesn't control as many shares as the report's author, Bo Petterssen, says he does.
The status and nature of the IKEA Group -- particularly the role the foundation plays -- are disputed among experts in Sweden, Petterssen allows. But he argues that Kamprad still controls the company and employees still call him the owner.
"They're trying to separate power and formal ownership," says Petterssen. "But Kamprad is still active. He's the chairman of the charity."
Difficult valuations
Besides arguing that Kamprad controls more of IKEA than is commonly supposed, Petterssen contends that the privately held company is much more profitable than most people think. "Last year they had more than $2 billion in earnings," he says.
He arrived at his estimate of Kamprad's personal fortune by using that earnings figure and assigning it a p/e multiple of 25, comparable to what a publicly traded company of similar size and growth would command.
This implies that IKEA, if it were public, might have a market cap of more than $50 billion. If you interpret the firm's ownership structure the way Petterssen does, the overwhelming majority of that wealth would be Kamprad's.
Luisa Kroll, a Forbes associate editor who helps put together the magazine's list of the world's wealthiest people, stands by her estimate of Kamprad's wealth, which Forbes pegs at $18.5 billion. That's thirteenth on the list as of February 2004, but still far below Petterssen's figure.
She concedes, however, that it is quite difficult to estimate private wealth.
"Information on private fortunes is so sketchy," says Kroll. "Kamprad has several holding companies that own stakes in each other," she points out, suggesting the Veckans Affarer analysis may have included incorrect "double counting" of assets.
She says that Forbes also takes a more conservative valuation than did Petterssen. "He compares IKEA with public companies that we would not use," she says. In addition, he did not take out a percentage for charitable contributions the foundation made outside of the company.
Kamprad's assets have grown steadily in dollar terms, Kroll notes. "We even thought he might slip into the top ten this year," she says, "but not up to number one."
Maybe it's Buffett
The report of a decline in Gates' relative standing did perhaps contain a kernel of ironic truth. A new coronation was the right idea; the Swedes just picked the wrong ascendant to the throne.
Forbes handicaps the wealth stakes almost continuously, according to Kroll. While the published rankings are based on where each individual's wealth stands on a specific date (February 6 this year), each fortune varies with every up or downtick of the stock market.
In Gates's case, that means because his Microsoft holdings fell by about 4.5 percent between February 6 and April 2, his assets could have been reduced to somewhere around $45 billion.
Meanwhile, the stock of Warren Buffett's Berkshire Hathaway, rose about 4.4 percent. Buffett was already second on the Forbes list at $42.9 billion, and the vast bulk of his assets are in the form of Berkshire stock. The gains in Berkshire's price may have pushed Buffett's wealth above $45 billion.
"For a few minutes on Friday (April 2)," says Kroll, "Buffett may have passed Gates."
In any event, the two men are now almost certainly running neck and neck.
If Buffett does overtake Gates this year and hold the lead until next February, it would mark the first second-place finish for Gates since 1997, when the software tycoon lost out to the Sultan of Brunei.
Wherever Gates winds up next February, he should retain one distinction for a very long time.
When Microsoft stock peaked in 1999, Gates had assets of more than $90 billion. That means he has lost about $45 billion, more money than anyone in history.
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