Just days after donating millions to university research, mining magnate and philanthropist Andrew “Twiggy” Forrest can afford to be even more generous, after a spike in Fortescue Metals’ share price earned him a staggering $440 million paper profit in just two days.
Mr Forrest was lauded by Prime Minister Tony Abbott on Tuesday for his $65 million gift to the University of Western Australia to fund scholarships, postdoctoral fellowships and a residential college, thought to be the largest single philanthropic donation in Australian history.
And the goodwill seemed to flow to investors, who pushed Fortescue shares higher by 43 cents over the past two days of trading.
That increased the value of Mr Forrest’s one-third shareholding in the near-$17 billion company by $441.136 million.
So Mr Forrest’s stake in the company, which he founded in his living room, on Wednesday soared worth more than $5.5 billion, with other assets likely to put his fortune way above that.
And let’s not forget the tidy sum he receives from dividends, which are set to rise.
Australian Stock Report head of research Geoff Saffer said the main factor driving the recent surge in Fortescue’s share price was expectation of a strong September quarter production report, including rising output and improved margins, on Thursday.
Invast Securities chief market analyst Peter Esho said the iron ore sector had been running hard of late, including Mt Gibson Iron, Atlas Iron and Sundance Resources on the back of solid reports and a healthy price for the steel-making commodity.
It was unlikely Mr Forrest’s philanthropy had influenced investors, both analysts said.
And a paper profit is very different to a crystallised profit, Mr Esho said.
With Mr Forrest and his wife Nicola the first Australians to participate in the ‘Giving Pledge’ philanthropic movement begun by US billionaires Warren Buffet and Bill Gates, they have vowed to give half of their wealth away.