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http://www.bloomberg.com/bw/articles/2013-03-28/eike-batista-the-man-who-lost-25-billion-in-one-year
Eike Batista, the Man Who Lost $25 Billion in One Year
By
Alex Cuadros,
Juan Pablo Spinetto, and
Cristiane Lucchesi March 28, 2013
Photograph by Ueslei Marcelino/Reuters
Investors betting against him will be “caught with their pants down.” —Batista, on Twitter
A year ago, Eike Batista was Brazil’s richest man, and his goal of climbing to No. 1 in the world seemed within reach. After founding five publicly traded natural-resource companies in six years, he’d just sold a stake in his EBX Group conglomerate that valued his holdings at $34.5 billion. His companies had yet to turn a profit, so the deal, struck with an Abu Dhabi sovereign wealth fund, was mainly a testament to Batista’s vision: an integrated empire of companies, shipping oil and iron ore to China from a port he was building near Rio de Janeiro. “I think Eike is a special kind of entrepreneur,” said Brazil’s President Dilma Rousseff during a visit to the port project in April. “He’s a person who comes up with extremely ambitious dreams and then seeks to fulfill them.”
Today, Batista’s empire is under siege. His port, which he said would be the third-largest in the world, is still under construction, just one of many delayed projects and missed production targets. That, together with a 34 percent decline in the price of oil since 2008, has battered his companies’ share prices and knocked $25 billion off his net worth, more than the entire fortune of Amazon.com founder Jeff Bezos. “People were basically ********* in a PowerPoint presentation,” says Ed Kuczma, an emerging-******* analyst at Van Eck Associates, which holds shares in Batista’s companies. “He’s very charismatic. I’ve seen him on roadshows and he definitely lightens up a room when he walks in. But he doesn’t have the credibility he used to.”
With a net worth of $9 billion, Batista has fallen off the Bloomberg Billionaires Index’s top 100 and dropped to No. 4 in Brazil. Investors, concerned about his companies’ continued ability to borrow money, have made OGX Petróleo e Gás, his largest holding, into Brazil’s second-most-shorted stock. (Short sellers borrow shares and sell them, hoping to buy them back at lower prices.) On March 22, OSX Brasil, Batista’s shipbuilding and oil services company, plunged 17 percent, to a record-low 4.88 reais a share. OGX fell 9.2 percent. On his Twitter account, Batista wrote that investors betting against him based on “rumors and gossip” would be “caught with their pants down.” In five years, he tweeted, his projects would remake Brazil as a “mega-efficient” country. A person close to EBX, who asked not to be identified because the matter is private, says that Batista’s companies are not facing any short-term financing problems and have $6 billion to $7 billion in cash. Batista declined to comment.
Video: Richest Man in the World? Long Way Off for Batista