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Moderna millionaires and the double-edged sword of stock market riches

The state’s thriving life sciences and tech sectors are creating fortunes, bolstering the economy — and widening the wealth gap.

The Moderna headquarters in Cambridge.Craig F. Walker/Globe Staff/file

In just a few years, Moderna went from stock market dud to moonshot, a prime example of how our state’s life sciences and tech companies, riding a powerful Wall Street wave, can create wealth that ripples through the local economy.

If you weren’t paying attention — and most people outside of the biotech industry weren’t — the Cambridge company’s shares went nowhere after its initial public offering in late 2018. Nowhere, that is, until Moderna jumped into the race to develop a COVID-19 vaccine about a year later.

The stock blasted off and reached a high of $497 in August, compared with $21 in February 2020, when the vaccine was sent to the National Institutes of Health for testing. Even after a punishing sell-off last week on concerns that future vaccine sales won’t be as robust as Moderna had indicated, the stock is trading at $237, giving it a market value of $96 billion. That’s the highest of any of the state’s publicly traded biotech companies.

Moderna’s top executives and early investors have become astoundingly rich, even after last week’s pounding, which illustrated just how transitory stock market wealth can sometimes be. Cofounder Robert Langer holds a stake worth nearly $2.8 billion, while CEO Stephane Bancel controls $5.3 billion of stock, plus options that were valued at $1.2 billion at the end of last year.


But the new wealth doesn’t stop there. A significant swath of Moderna‘s 2,400 employees owns shares through its stock purchase plan. The company also has issued options and share grants to employees and others that have a combined paper profit of $8 billion.

“The number of millionaires [at Moderna], at least on paper, has got to be through the roof,” said Tony Mullin, a biotech human resources executive with knowledge of compensation levels throughout the industry.


Mullin witnessed the stock wealth effect in action when his former company, Watertown’s Pandion Therapeutics, was acquired by Merck & Co. in April for $1.85 billion. “Lots of people got instantly rich,” he said.

This bonanza is happening at tech and biotech companies across the local landscape: Vertex, HubSpot, Ginkgo Bioworks, Toast, Wayfair, and DraftKings, just to name a few of the big winners. The companies and their employees, many of them in their 30s and 40s, are flush with cash. Their spending is filtering through the economy, boosting everything from housing prices to sales of luxe cars, watches, and wines.

To cite one conspicuous example: Sales at European Watch Company have grown 25 percent a year over the past several years, according to Joshua Ganjei, general manager of the Newbury Street store, where the most expensive timepieces can easily top $100,000. “Demand is in uncharted territory,” he said.

The benefits of this gold rush, however, have not been evenly distributed. They never are. More on this extremely important caveat in a bit.

Massachusetts has long been one of the richest states based on incomes, as well as by a broader measure of wealth, called net worth, that includes stocks and bonds, real estate, pensions, and privately owned businesses. The government doesn’t break down net worth at the state level, but the country as a whole has grown richer over the past decade thanks to rising stock prices and home values.


US household net worth reached $134 trillion in June, up 22 percent since the final three months of 2019, according to the most recent Federal Reserve data. That stretch includes the brief recession and bear market last year caused by the pandemic, as well as several rounds of federal relief payments.

Stocks, as tracked by the Standard & Poor’s 500 index, gained 34 percent in the past year, and single-family home prices, both in Massachusetts and nationally, increased about 15 percent, data from Zillow show.

People tend to spend more when financial markets are doing well; they feel richer, even if they haven’t cashed out yet.

“The stock market has always been a confidence barometer,” said Ernie Boch Jr., whose Boch Exotics auto dealership sells high-end nameplates such as Ferrari, Maserati, and Porsche. After stockpiling cash during the pandemic, many consumers have more discretionary income and feel ready to spend, he said. Even with a spike in car prices due to supply disruptions, the wealthiest are buying very expensive cars.

“Bentley is going to have the best year ever,” Boch said. “So will Rolls Royce. McLaren is up crazy.” Point of reference: McLarens start at about $200,000 and travel all the way up to $2 million.

Money is also pouring into high-end real estate. In the downtown Boston condominium market, sales of units costing $3 million or more set a record for the year through Oct. 29, according to LINK data provided by Douglas Elliman Real Estate. In the past two months, three penthouse units in the Mandarin Oriental on Commonwealth Avenue sold in two separate transactions for a combined $48.8 million.


But it’s not just toney condos in the Back Bay or the Seaport that are being scooped up, said Kevin Ahearn, chief executive of Douglas Elliman’s Boston division. For the first time in his 40-year career, the state’s three big housing markets — Boston, the suburbs inside I-495, and second homes on the Cape — are running hot at the same time, he said. Recent numbers show that the Greater Boston housing market is cooling slightly, but that mostly means prices aren’t rising at the torrid clip of a year ago.

“It’s just been an extraordinary run,” Ahearn said.

One business to feel the impact of a strong economy is the Urban Grape, a wine store in Boston’s South End. Co-owner Hadley Douglas lauds her corporate clients for their commitment to the community, including Black- and women-owned businesses like hers.

“There is a lot of great company-building going on here,” said Douglas, who started the store with her husband, TJ, who is Black. And spending by business customers — primarily for wine-tasting events and gifts — has been a key source of growth.

“That really moves the needle for small businesses in a huge way,” said Hadley Douglas. “It allows us to hire people, to give people raises.”

Now to the caveat I teased earlier: Even with all the lavish spending we’re seeing, the gains from a roaring stock market stay mostly with the rich. No surprise, I know. But it’s often glossed over when we marvel at the market’s latest record high.


The wealthiest 1 percent of Americans owned 54 percent of corporate stock and mutual fund assets as of June 30, according to the Fed. The share for the top 10 percent is 89 percent.

Stock market profits are driving a widening wedge between the rich and the rest of us, with the top 10 percent controlling 70 percent of the nation’s total wealth, compared with 61 percent at the start of 1990.

The thriving tech and life sciences sectors make the Massachusetts and national economies more vibrant. The pie is growing, and that’s the good news.

But for half the country — the bottom 50 percent by net worth — its slice of the pie is shrinking.

It’s a trend that can only end badly.

Anissa Gardizy of the Globe staff contributed to this story.

Larry Edelman can be reached at larry.edelman@globe.com. Follow him @GlobeNewsEd.