As any experienced investor knows, investing is a long-term game. While you might feel inclined to sell your shares when faced with extreme price slumps, the key is to weather the storm because, in the long term, you should see gradual growth. Still, even with this principle in mind, suffering sharp price drops doesn't get any easier. Perhaps no one in this world understands this pain more than the famous Walton family. The wealthiest family in the United States, they know exactly how it feels to lose an inconceivable sum of money in as little as a few hours. All it took was one fell swoop to bring this family's world crashing down.
Sam Walton, the patriarch of the Walton family, was a simple man with big ambitions. Born and raised in the town of Kingfisher, Oklahoma, Walton opened the first-ever Walmart store in 1962. Established with the intention of promoting the sale of American-made products at reasonable prices, this was just the start of Walton's rise to the top of the American retail industry. Soon enough, he built Walmart into a retail empire, with the franchise eventually consisting of over 10,000 stores worldwide. That's in addition to Sam's Club — one of America's leading membership-only retail warehouses. But while Walton may have realized his dream of building a retail empire, this didn't happen without a few bumps along the way.
Sadly, Walton passed away in 1992. With the brain behind the franchise no longer around to guide it, Walton's family had to step up to the plate and do their best to fill his shoes. Today, the Walton family continues to do its best to live up to their patriarch's legacy. At the forefront of this effort are Walton's children, Alice, Jim, and Rob, his daughter-in-law Christy, and Christy's son Lukas. Together, the Walton family owns just under half of the company — an investment that has helped them to reach a jaw-dropping collective net worth of over $212 billion and thus paved the way for them to become the richest family not just in America but the world. But while they may have enjoyed widespread financial prosperity over the years, the Waltons would soon suffer a blowback deeper than any investor had ever experienced.
The recent years have not been kind to Walmart, or businesses in general for that matter. Global issues such as the pandemic and regional conflicts have led to economic difficulties which, in turn, caused Walmart's leadership to wonder how they could cope with the repeated series of economic recessions. Finally, in May 2022, the Walton family faced their biggest financial issue to date. Upon releasing its quarterly earnings report, it quickly became apparent that Walmart was going through a tumultuous time, missing out on analysts' projected income for the company. This disappointing news resulted in Walmart's stock plummeting by 11.4% on the New York Stock Exchange and, as a result, a colossal $19 billion loss for the Walton family. What exactly were the factors that led to this devastating financial loss?
A world of hurt
This shocking decline in Walmart's stock is the largest that the company has suffered since 1987. Still, the question remains — what did the company do to incur such a devastating loss? Unfortunately, much of the issue was out of Walmart's hands, with the company being negatively affected by skyrocketing fuel prices, overstaffing at times when employees contracted COVID-19, and inventory issues. What's more, with many consumers facing financial uncertainty, Walmart's mostly consisted of cheaper items instead of the real money makers, such as electronics and other luxury items. Still, even with the company going through financial difficulties, it's important for the Waltons to remember that tough times never last and that, with the right strategy, this retail giant can return to its winning ways.