‘You guys are real idiots’: Tycoon lashes out as he loses $9 billion in two days
By Michael O'Boyle
Shares of Grupo Elektra have plunged to the lowest since 2007, wiping $US5.8 billion ($9 billion) from the fortune of controlling shareholder Ricardo Salinas Pliego and pushing him out of the world’s top 500 wealthiest list.
The stock tumbled 16 per cent to 230 pesos in Mexico City, extending the previous day’s 71 per cent decline. Elektra was trading at 944.95 pesos in July when Salinas triggered a trading halt, alleging he was a victim of potential fraud.
The sharemarket plunge pushed Ricardo Salinas out of the world’s top 500 wealthiest list.Credit: Bloomberg
His lawyers claimed a creditor had used the company’s shares to fund a $US110 million loan, and later discovered most of the shares appeared to have been sold, pushing the stock price down. The rest, they say, was pocketed by the creditor, who has denied any wrongdoing.
After a month of no trading, Elektra was kicked out of the country’s benchmark index. That’s now putting pressure on the shares as exchange-traded funds managed by BlackRock and The Vanguard Group have to sell.
Elektra had tried to stop trading from resuming, saying it could cause “irreparable damage.” On Monday, the company reiterated the claims, adding that anyone dealing in the stock could be held responsible and that there was a “high risk of transactions being carried out with shares introduced in the market in an improper manner.”
“It is our obligation to reiterate that the resumption of trading in these, in addition to causing irreparable damage, could involve shares obtained improperly,” Grupo Salinas spokesman Luciano Pascoe said in a response to questions.
Monday’s plunge pushed Salinas out of the world’s top 500 wealthiest list. His stake of about 75 per cent in the Elektra is now worth some $US1.9 billion, down from $US7.6 billion on Friday. That gives him a net worth of $US4.7 billion, according to the Bloomberg Billionaires Index.
“You guys are real idiots,” Salinas wrote on X in response to posts about the drop in his wealth.
“This year broke a record in earnings. How do you like that? You all don’t understand that we decided to exit the stock market and nothing more. In a year, let’s see how we have done.”
While the slump is vaporising Salinas’ wealth on paper — which had been a key fixture of his ability to take loans out against Elektra’s value — it could make a bid to de-list the shares easier. Elektra said last week it would hold a meeting in late December to discuss taking the company private.
Adding to concerns, Mexican President Claudia Sheinbaum on Tuesday called on courts to resolve a series of a cases over government claims that Grupo Elektra owes billions in taxes.Credit: Bloomberg
Salinas, 69, has long been the third-wealthiest Mexican behind Carlos Slim and German Larrea. Heading into this week, he was ranked the world’s 262nd-richest-person by the Bloomberg Billionaires Index.
Adding to concerns, Mexican President Claudia Sheinbaum on Tuesday called on courts to resolve a series of a cases over government claims that Grupo Elektra owes billions in taxes.
Mexico claims four companies controlled by Salinas owe some 63 billion pesos ($US3.1 billion) in taxes and the country’s Supreme Court is set to review final challenges in several of those claims. Salinas has said the government is unfairly trying to tax his companies twice.
Bloomberg
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