High-yield/macroeconomics (fka YIELD)

[Preciouslife1]

How to turn a Billion into millions, a trick that can
happen overnight or two

http://online.wsj.com/article/SB120571021671940207.html

A DEAL FOR BEAR STEARNS

A Stake Through the Heart/Bear's Biggest Holders May Have Little Choice But to Cut Their Losses
By CASSELL BRYAN-LOW and KATE KELLY
March 17, 2008

British billionaire Joseph Lewis made his fortune gambling on currencies. His recent investment in Bear Stearns Cos. has turned out to be a disastrous bet.
The elusive septuagenarian is one the biggest losers from the New York investment bank's problems. In just a few months, he has paper losses of about $800 million on his roughly 9.6% stake in Bear, whose share price has cratered in recent days.
A small cadre of investors, often considered some of the best in the business, own big stakes in Bear that aren't looking good. A number of these shareholders are the type of investors who ordinarily would take a hard line in a sale, demanding a higher price. But with Bear on the brink, they may have little choice....{Fear and Greed, bad things man, bad things}

Among the stakeholders: James Barrow, a Dallas money manager who runs the firm Barrow, Hanley, Mewhinney & Strauss Inc., is the single biggest investor, with a 9.95% stake, according to recent regulatory filings. Bear Stearns Chairman James Cayne, who stepped down as chief executive in January amid criticisms by some investors that he was too hands-off when the mortgage mess unfolded, holds a stake just under 5%. So does activist investor Bruce Sherman, the CEO of Naples, Fla., money-manager Private Capital Management Inc., a unit of Legg Mason Inc., recent regulatory filings show.

Sherman, who persuaded the media company Knight Ridder Inc. to put itself up for sale in 2005, has taken a more active stance with Bear in recent months, say people familiar with the matter. He closely questioned Bear lead director Vincent Tese about the investment bank's problems last summer and made his dissatisfaction with Mr. Cayne clear to Bear officials in the weeks preceding Mr. Cayne's early-January resignation as CEO, these people said. Mr. Sherman's firm held 5.5 million Bear shares as of Dec. 31, 2007, or a 4.8% stake. Those 5.5 million shares at Friday's close were valued roughly at about $166.5 million, down 80% from a year ago.

Mr. Sherman was unavailable to comment, a spokesman said yesterday. Mr. Lewis was unavailable to comment, a spokesman said. An assistant in Mr. Cayne's Bear office said he was in a meeting and unavailable for comment. Mr. Barrow didn't respond to a request for comment.{{They have him strapped down on a gurney, while he still tries to give everyone the finger}}

Mr. Lewis made his fortune as a currency trader, once amassing a 30% stake in auctioneer Christie's International PLC, and has spent the past decade investing in an array of businesses, including real estate, oil and gas, and sports.
He now lives in the tony Lyford Cay development in the Bahamas. He got involved with Bear first as a client and became a major investor last year.{{He will be moving to downtown Detroit soon, and is now eating caviar helper it has been reported}}

Mr. Lewis long has been a client of Kurt Butenhoff, one of Bear Stearns's heavy hitters in private-client services. Mr. Butenhoff brought the relationship with him to Bear from Salomon Bros., where Mr. Butenhoff was a high-net-worth broker in the early 1990s.

Mr. Lewis began rapidly building his stake in Bear Stearns last summer, shortly after the bank announced that two internal hedge funds had imploded. In December, his stake rose to just under 10% from about 7% when Bear's stock price fell below $110, forcing him to make good on an options trade he had made with another party.

Mr. Lewis could have sold his obligation to buy and washed his hands of an unlucky trade. Instead, he chose to exercise his options, filings show, acquiring hundreds of thousands of new shares. He owns more than 11 million Bear Stearns shares, according to a December regulatory filing. {{OUCH}}


Friday, Bear's shares fell 47% to a nine-year low of $30 in New York Stock Exchange composite trading after the Federal Reserve and J.P. Morgan Chase & Co. stepped in to keep the firm afloat following a severe cash crunch. It doesn't appear from reviews of regulatory filings that Messrs. Sherman, Cayne, Barrow and Lewis have sold shares in recent weeks.

The son of a cafe owner in London's East End, Mr. Lewis started work there and later expanded the family business to create a small empire of theme restaurants. He acquired the nickname "the boxer" in part because his name is similar to boxing legend Joe Louis and also because of his shrewd approach to business.

Mr. Lewis's recent endeavors have included developments in central Florida, where he owns Isleworth and another gated community. About six years ago, Mr. Lewis purchased a stake in Tottenham Hotspur PLC, a soccer club based in northeast London. A keen golfer, Mr. Lewis hosts the Tavistock Cup tournament and has befriended golf star Tiger Woods.