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wasted money

08.15.

Eike Batista Has Lost $34.3 Billion In The Last 12 Months

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Eike Batista was born November 3, 1965 in Governador Valadares, Minas Gerais, Brazil. His father was the Minister of Mines and Energy for a state-owned conglomerate. As a teenager, Batista moved with his family to Europe when his father was promoted to new positions in Switzerland, Germany then Belgium. After the family returned to Brazil, the 22 year old Batista stayed in Europe and took a job as a door to door insurance salesman. When he was 23, Eike moved back to Brazil where he launched a gold trading company called Autram Aurem. Over the next 20 years, he went on to launch five new companies that specialized in mining gold, silver, natural gas, petroleum and various other commodities. The companies were controlled by Eike’s umbrella firm, EBX Group.

Eike’s wealth began to soar in the mid-90s, thanks to booming markets in commodities, real estate, entertainment, tourism and hospitality in Brazil. Pretty soon, Mr. Batista found himself sitting on a bonafide 10 figure bank account. When times were good, Eike violated one of the most important rules of modern business: Never personally guarantee anything. If your business borrows money, never personally guarantee to pay the loan back.

In December 2010, Eike Batista told 60 Minutes that Carlos Slim should watch out, because some day soon he would be stealing the Mexican tycoon’s title as richest person in the world. Two months later, Batista told Business Week that within 10 years his net worth would top $100 billion. Bold statements for a man whose net worth at the time was just $8 billion, compared to Carlos Slim’s $63 billion. But fast forward two years and those predictions didn’t seem so crazy after all. As worldwide commodities markets continued to soar, by August, 2012, Batista’s net worth grew an astonishing 331% to $34.5 billion. That was enough to make him the richest person in South America and the eighth richest person in the world.

Unfortunately, August 2012 turned out to be the absolute peak of the worldwide commodities market and subsequently Eike Batista’s personal wealth. Over the last 12 months, Batista’s OGX has declined 87% after oil production slowed from 750,000 barrels per day to just 15,000. The collapse of mineral prices equally obliterated Batista’s remaining four companies. Making matters worse, because Eike personally guaranteed $3.5 billion worth of corporate loans, a variety of creditors began to circle him like vultures.

In less than a year, Eike Batista has seen his wealth decline 99.4%, from $34.5 billion to just $200 million. If this decline remains or gets worse, it may turn out to be the largest evaporation of personal wealth in human history. After his Playboy model wife left him, he actually began parking his $1.2 million Mercedes-Benz McLaren SLR in the living room, because he could. In recent weeks, Eike has been forced to the Benz along with mansions, artwork, a $19 million racing yacht and three private jets. Only time will tell if Eike can make a comeback, but things are certainly not looking good at the moment. Eike himself announced over twitter that anyone who bets against him now will be “caught with their pants down”. I guess anything is possible… How would you feel if you lost $34.5 billion in 12 months?

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07.23.

Becoming Millionaires by Selling Domain Names

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Business.com made headlines for being the most expensive domain name in the world when it was sold for $7.5 million in 1999.  The record lasted till 2006 when it was broken by Sex.com which sold for a whopping $14 million in 2006 when Gary Kremen of Match.com decided to quit the adult entertainment industry.  The market for resale of domain names is pretty strong, though not as much as it was during the peak of the dot-com era.  There is a business that amounts to millions of dollars in the resale of domain names.  The most expensive domain name sold is Insure.com that was sold in 2009 for $16 million.  There were many other worthy domain name sales that happened in 2009 which include Toys.com and Candy.com.

It is frustrating when you find out that someone else has beaten you to a domain name and it is even more frustrating when you learn that they are parking it with a motive of reselling it to you at an inflated price.  Here are ten domain names that have turned their owners into millionaires:

 

1. Sex.com

Sex.com earned a whopping $13,000,000 and is the top selling domain name till now.

 

2. Fund.com

Fund.com might not be a perfect domain name, but it was worth a little under 10 million dollars ($9,999,950) when it was bought in 2008.

 

3. Porn.com

Porn.com was sold in May 2007 with its self-explanatory name for  $9,500,000.

 

4. Fb.com

Fb.com does ring a bell as people now identify it with Facebook also known as “FB”.  Perhaps this domain name was based on the owner’s initials, but boy did he strike gold with this one!  Along the years, Mark Zuckerberg, the founder of Facebook decided to buy fb.com for $8,500,000 in 2010.

 

5. Diamond.com

This domain name is another one that is obvious and that is why it was bought for $7,500,000.

 

6. Beer.com

Beer.com has got to be a favourite with men, as ‘beer’ is majorly googled by them.  This one was bought for a whopping seven million dollars in 2004.  However, there is nothing you see on the website as it appears to be a parked domain waiting for the prospective bidder! r pocket.

 

7. Casino.com

This one is a successful website as online gambling has become a fast-catching trend nowadays; however, the sad part here is that it did not quite fetch a high price as it was sold for $5,500,000 in 2003.

 

8. Slots.com

This was sold at the same price of Casino.com ($5,500,000) and that too seven years earlier!

 

9. Toys.com

This domain name was purchased by the toy giant ToysRUs in 2009 for $5,100,000.

 

10. Asseenontv.com – $5,000,000

This domain name was sold in 2000 for five million dollars because reality TV was on the upswing and purchasing it was a shrewd business decision.   However, this domain is still parked and awaiting a lucrative deal.

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07.01.

Alex Rodriguez Desperately Trying To Retire To Save $114 Million Contract

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Ever since Alex Rodriguez underwent surgery in January to repair torn cartilage in his left hip, the third baseman has been locked in a tense cold war with New York Yankees senior management over the future of his baseball career. This week, that cold war went nuclear in a very bitter and very public way. The 38 year old Rodriguez, who performed so atrociously last season that he was actually benched in the playoffs, is still technically owed $114 million on his contract regardless of injury or performance. For the most part, baseball contracts are 100% guaranteed, but that guarantee goes away in the case of drug related suspensions. And it just so happens that A-Rod is one of 20 players who Major League Baseball is imminently looking to suspend as part of an ongoing performance enhancing drug scandal. These circumstances have set up a race in which A-Rod is desperately trying to use a unique contract loophole to retire before the suspension comes down and collect his full $114 million. Meanwhile, The Yankees are desperately trying to keep him on the injured list so he can’t retire before the suspension takes place and voids his contract.

Thanks to a loophole in the MLB players association contract, if Rodriguez is cleared to play for even one game before the suspension, he can suit up and technically retire as soon as the game is over. If that happens, when the suspensions come down, A-Rod won’t be affected because he technically won’t be an active player anymore. You can’t suspend someone from something they no longer do. This is exactly why Alex is rushing to get approval from the Yankees doctors to suit up for a game. Even if he rides the bench, as long as he sits in the dugout wearing a uniform for one regular season game, he can immediately retire when the last strike is called. Under current union rules, if A-Rod claims he is physically unable to perform anymore, he can retire and retain 100% of that $114 million contract. In other words, he would be paid an average of $22 million per year for the next five years to sit on a beach. On the other hand, if The Yankees are able to keep A-Rod on the disabled list until the suspensions come down, the entire $114 million contract could be completely voided.

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06.17.

How A Private Jet Full Of Prostitutes Made Mikhail Prokhorov $10 Billion

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f you ever meet a magic genie and are given the chance to switch lives with one other person on the planet, you probably won’t regret picking Mikhail Prokhorov. Mikhail Prokhorov is a self-made 48 year old Russian billionaire playboy who is perhaps most famous in the western world for being the new owner of the NBA’s Brooklyn Nets. Outside of the pro sports, Mikhail has used his massive bank account to build a dream life that includes super model girlfriends, mansions around the world, two mega-yachts, an ultra luxurious private jet and even a semi-successful political career. He is essentially, the ultimate billionaire playboy. And to think, none of it would have been possible without the help of a private jet full of prostitutes and a debaucherous New Years party that landed Prokhorov in a French jail back in 2007. Wait…what??!!

As of June 16th, 2013, Mikhail Prokhorov’s $13.5 billion net worth is enough to make him the 9th richest person in Russia and the 70th richest person in the world . However, unlike most billionaires, the majority of Mikhails’ net worth is made up of cash and other very liquid assets.

In January 2007, Mikhail Prokhorov and a group of close friends hopped aboard his private jet and flew to the upscale French resort town of Courchevel, high up in the Alps to celebrate the Russian Orthodox New Year. Also on board that flight: Eight 20 year old sexy Russian prostitutes. Technically the women were never proven to be anything more than “models” who were brought for “entertainment”, but any reasonable person would agree that this is a very grey area.

After a debaucherous three day party that has been described as a massive orgy, 50 French police officers swooped in and arrested Mikhail and all of the “models”. The women were immediately released, but Mikhail was held in a jail cell for four days on charges that he was importing prostitutes. He was eventually released and all charges were dropped, but the incident sent shock waves all across Russia. The scandal was parodied on dozens of television shows, commercials, magazines and radio stations.

With Norilsk Nickel’s stock price at an all time high, Vladimir Potanin saw the scandal as the perfect opportunity to push his old business partner out to pasture. Over the next 12 months, both parties fought bitterly over the future of Norilsk Nickel. In the end, the pressure was just too much for Prokhorov and he was forced to liquidate 100% of his holdings in the company. He ended up selling his stake to Oleg Deripaska, who at the time the richest person in Russia with a net worth of $28 billion. The final sale price for Mikhail’s stake was $7 billion in cash and $3 billion worth of stock in one of Oleg’s aluminum mining companies.

As it turns out, the timing of his sale could not have been any better. In October 2008, just a few months after Mikhail cashed out, the world economy collapsed. As stocks plummeted, the global commodities market was eviscerated. Oleg Deripaska’s net worth plunged 85% from $28 billion to an all time low of $4 billion (it has since risen back up to $9 billion). All of a sudden, Mikhail Prokhorov found himself sitting alone atop the list of the richest people in Russia and within a few years, as the economy recovered, his net worth grew to over $13.5 billion. Mikhail is no longer the richest person in Russia, but he may be the happiest! After all, if it weren’t for a plane full or high end Russian prostitutes, today he probably wouldn’t be sitting on a mountain of cash as the owner of Brooklyn Nets and Jay-Z’s best friend.

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