The Wall Street meltdown appears to have claimed another casualty: Bruton Smith's billionaire status.
Like almost everyone who holds stock, the speedway and auto sales titan has seen his stock holdings battered in the financial crisis. But as majority owner of two public companies – one in the Fortune 500 – Smith's hit in the past year has been bigger than most:
Nearly $1 billion.
That staggering amount – more than $100,000 an hour, or about $30 a second – makes Smith one of many corporate giants whose portfolios have been punished by the market plunge. With Wednesday's close of 8,282.66, the Dow Jones industrial average has tumbled 36 percent in the past year, including 29 percent in the last three months.
As founder, chairman and chief executive of Sonic Automotive, Smith, 81, owns more than 12 million shares in the Charlotte-based company, one of the nation's largest auto retailers. In the past year, the value of those shares has plummeted 87 percent, costing him more than $268 million.
Smith also is chairman and chief executive of Speedway Motorsports, which owns Lowe's Motor Speedway and six other major tracks. His roughly 29 million shares in the Concord-based company have declined in value by more than 64 percent, erasing more than $711 million.
Put those losses together, and holdings worth more than $1.4 billion last November now check in at about $434 million.
Smith was unavailable for comment Wednesday. It's important to note that the losses are on paper, meaning he doesn't lose money unless he sells the shares.
In addition, Smith has holdings that are not publicly disclosed, as well as other assets that are part of his net worth. In 2003, when he previously fell off Forbes' billionaires list because his public holdings fell below $1 billion, his spokesman told the Observer Smith remained a billionaire because private holdings pushed him “through the billionaire threshold.”
As big as Smith's market losses are, recent reports show that they're far from the nation's worst in this brutal year on Wall Street.
Research by Steven Hall & Partners, a compensation consulting firm, found an average decline of 49 percent for the corporate stock holdings of chief executives at 175 large U.S. companies, the Associated Press reported last week. Corporate giants who have lost more money than Smith include Warren Buffett of Berkshire Hathaway, $13.6 billion; Larry Ellison of Oracle, $6.2 billion; and Steve Ballmer of Microsoft, $5.1 billion.
All are members of the Forbes 400, a list of the richest Americans compiled by the business magazine. Released in September, this year's report included this prediction: “Given how unsettled the stock market is, some of those on our list will become significantly richer or poorer within weeks – even days – of publication.”
Some already had seen steep declines in their net worth. Charlotte resident C.D. Spangler Jr. – a major Bank of America shareholder, construction company owner and former University of North Carolina president – lost about $900 million in the past year, Forbes said. His net worth of $2 billion placed him 227th on the Forbes 400, down from 130th in 2007.
Smith dropped off the list altogether after placing 317th last year – down from 278th in 2006 and 207th in 2005. Forbes shows his net worth dropping from about $1.6 billion in early 2007 to $1.2 billion earlier this year.
Now it's probably around $600 million, said Matthew Miller, a Forbes editor who oversees the Forbes 400 list. Along with stock holdings, Miller said, Forbes includes assets, dividends, cash from sales and other items in their “snapshot of estimated wealth” for each person.
The turmoil on Wall Street hasn't forced Forbes 400 members to start clipping coupons or miss mortgage payments, Miller said, but nearly everyone on the list has endured losses, most of them big.
“There are very few members who have seen their net worth go up,” he said. “Billionaires are taking it on the chin.”