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Mining Tycoon Loses $6 Billion In Two Days

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  • Mining Tycoon Loses $6 Billion In Two Days

    How to Lose $6 Billion in 48 Hours - Yahoo! Finance

    Brazilian mining magnate Eike Batista loves to talk in superlatives.

    He's the richest man in Brazil and talks frequently about becoming the richest man in the world. His autobiography is sub-titled "The Path of Brazil's Greatest Entrepreneur." And whether it's racing speedboats or marrying Playboy models, he lives life to the maximum.

    But now, Brazil's Donald Trump may have set a new record - for the largest amount of wealth lost in 48 hours.

    According to an article in the Los Angeles Times, Batista lost $6 billion of his paper fortune in two days as the stock of his oil company plunged 40 percent in two days in June.

    The immediate problem was that his company cut production targets. The larger issue is that the perpetual promoter described as a "one-bubble man" has a history of promising more than he can deliver. And, of course, he has ridden the Brazilian asset-boom all the way to the top.

    Batista's fall may, in fact, make him the King of the High-Beta Rich. In our current age of sudden wealth and sudden-wealth loss, where fortunes are tied to quick-trading paper rather than real assets, it's hard to find another case where someone has lost so much money so quickly.

    Batista is still rich, with a total fortune at $15 billion, or half of his previous peak of $30 billion. And there may be others who have lost a larger percentage of their wealth in 48 hours. But losing $6 billion in 48 hours appears to be a record in recent history.

    Here are some other competitors in the Biggest Losers contest among today's High-Beta Rich:

    MARK ZUCKERBERG - Zuckerberg has remained silent on his company's wild valuation ride. But back in may, his paper fortune fell by more than $3 billion over two and a half days when Facebook's stock slide from $38 to just above $27.

    SHELDON ADELSON - Adelson lost $25 billion, or 90 percent of his fortune, back in the crisis days of 2008. But the loss was over a period of weeks rather than days. And as proof of how High-Beta Wealth is not simply about booms and busts but about constant volatility, Adelson made back most of his fortune - and then lost another couple billion in recent months.

    REED HASTINGS - Netflix founder Reed Hastings saw his paper fortune soar to more than $850 million - before it fell by nearly 75 percent over a period of weeks last fall. Of course, Hastings will be okay financially, since he's been program-selling for several years.

    GROUPON GUYS - When Groupon went public last year, its three co-founders became instant billionaires. Co-founder Eric Lefkofsky's Groupon-based fortune soared to more than $3.6 billion. The shares have since fallen by 73 percent. Like hastings, however, Lefkofsky will probably be taking his Beta in stride, since he cashed out hundreds of millions of dollars from Groupon before the IPO.