"Quantifying extreme wealth is a notoriously tricky business, since many billionaires have large and complex investments, some of which are public and some of which aren’t. Both Bloomberg and Forbes have released explanations of their methodology. Bloomberg says that its list relies on a mixture of public and private data, with the valuations of private companies being calculated relative to public competitors, and with a “liquidity discount” of 5 percent applied to companies whose “assets may be hard to sell.” Forbes says it relies on interviews with accountants, advisers and lawyers to compile its list, and takes into account “stakes in public and private companies, real estate, yachts, art and cash” while accounting for debt. Bloomberg says it makes no assumptions about personal debt.
Even with those considerations, the lists capture only paper wealth — the kind that can be tracked by running publicly available information through a mathematical model — and also the kind that tends to fluctuate wildly day to day.
Say, for example, you are calculating the net worth of Zynga’s founder, Mark Pincus (719 on this year’s Forbes list). You could multiply Mr. Pincus’s stake in Zynga (around 112 million shares) by the stock’s closing price of about $14.35 per share on Feb. 14, the day Forbes locked down stock prices for its annual rankings. Throw in ballpark values for any other holdings Mr. Pincus might have – houses, cars, non-Zynga stocks, angel investments in private companies – and you would arrive at a number close to the $1.8 billion Forbes says the tech mogul is worth.
But close the wealth rankings a day later – Feb. 15, a day on which Zynga released disappointing earnings and saw its shares slump to $11.80 – and Mr. Pincus is worth maybe only $1.5 billion, a paper loss of roughly 17 percent of his net worth overnight.
This is the kind of motion that makes the Bloomberg and Forbes lists fascinating to watch. But, of course, it has nothing to do with the liquid capital available to Mr. Pincus at any given time.
Even if he wanted to, Mr. Pincus could not dump his Zynga shares on the open market without provoking an investor panic. And if he were cashed out by a third party – say, if a private equity firm decided to take the company private – he would no doubt get a premium on the shares.
Both Forbes and Bloomberg try to increase the accuracy of their lists by talking to the billionaires themselves. But letting billionaires weigh in on their own worth introduces other risks, namely, the possibility of dishonesty.
“We don’t assume anyone’s telling us the exact truth,” Randall Lane, the editor of Forbes, said in an interview by phone on Thursday about his magazine’s methodology. “Some want to be higher, some want to be lower. That’s part of the fun.”
This year, Mr. Lane said, his reporting staff fielded calls about an Asian billionaire whose handlers tried to convince Forbes to switch the date on which they nailed down their prices; the billionaire’s stock was trading too low for his tastes. And there was the Latin American billionaire who wanted the magazine to raise his value based on an asset he claimed was worth $3 billion dollars, although the asset had not yet produced revenue.
“We try to be exact,” Mr. Lane said. “But even the people themselves, unless it’s someone who is 100 percent in publicly traded stock, you don’t know what your assets are worth.”
Mr. Lane conceded that the complex and shifting components of a seven- or eight-figure net worth made exact valuation nearly impossible in some cases. Moreover, he said, finding the correct numbers was not really the point.
“It’s less about the number, per se,” he said. “This is a scorecard of who the most important people are.”
Left unsaid by Mr. Lane is that the billionaires list has been a cash cow for Forbes, enough so that the magazine can assign 50 staffers in 16 countries to the project. Bloomberg’s list, too, has proven popular. It zoomed to the top of the most-read list on its terminals, and has been spawning daily article after daily article as members of the list overtake each other.
In short, Mr. Lane has a point: the reasons to make lists of billionaires may have less to do with quantifying wealth than giving outsiders an organized, ranked way to gawk at it – which, even in the Occupy era, seems to be a treasured and profitable pastime."
150 million? These "alleged rumors" Publicist nonsense. I'm calling bullshyt... 
