[Editor: Thumbnail is THE FIRST NEGATIVE BILLIONAIRE ]
The Negative Billionaire | How a Billionaire Lost Everything in 18 Months | Billionaires
who are Broke
What s up guys!
It s Jason here and welcome to my YouTube channel, Billionaire Insight in 2022.
Eike Batista.
Does the name ring a bell?
If you re from Brazil you probably heard of him but maybe not if you re from the United
States or elsewhere as his name isn t as well-known as say, Elon Musk, Bill Gates or Warren Buffet.
A decade ago, Eike Batista was the 7th richest man in the entire world and the richest in
Brazil, with a net worth of $35 billion.
That s with a B as in Billion not Million!
He was featured in Forbes and amongst the top 50 most influential people by Bloomberg.
This was around 2012 when Batista was flying high and trying to reach his goal of becoming
the #1 richest man globally.
I believe the Mercedes SLR McClaren, which was literally parked in his living room says
it all.
However, his efforts were all brought to a halt soon after.
Within 18 months of his peak, Eike Batista fell from sky-high to way way down low.
His empire crumbled to the ground stripping him off the billionaire list and into the
debt collection list.
His net worth?
Negative $1.2 billion in debt.
Basically, his FICO score went from a perfect 850 to a negative 850 to say the least.
So what happened to cause someone so rich and powerful to lose it all so quickly and
become a negative billionaire?
And what s happening to Eike Batista in 2022?
In this video, I m going to share with you the story behind the Rise and Fall of this
Brazilian Billionaire and 3 key lessons you can take away and apply to your life regardless
if you re a billionaire or not.
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So thank you guys so much and now let us continue on with the Negative Billionaire.
How the Negative Billionaire Started Eike Batista was born in a well-off family.
His father was from the mining industry and served as the Minister of Mining and Energy
as well as President of the iron ore giant, Vale.
To give a reference point, Vale is like the Exxon Mobile of mining it s huge!
After completing his education in Europe, Eike returned to Brazil at the age of 23.
Influenced by his father, he started a company that traded and mined gold.
His firm was named Autram Aurum, and with it, he was able to make a fortune worth a
few million dollars.
Over the next twenty years, which was during the 1980s and 1990s, Batista expanded his
business and was the owner of a number of gold mines.
He invested all over the place in mining, energy, gas, real estate and shipping.
By the year 2010, Eike had a number of companies under his name.
They were all led under the name EBX Group, located in Rio de Janeiro, Brazil.
All the sub-business companies had an X in their name.
MMX in mining.
OGX in petroleum.
LLX in logistics.
OSX for offshore and MPX in energy.
His trademark for including an X in all his company names followed the theory of believing
that the X stood for the multiplication sign, which symbolized the multiplication of wealth.
Well, for a while, that was true
Eike Batista was a charmer.
He knew how to attract and whom to attract.
By throwing his master development and business plans, he was able to win investors with the
snap of his fingers.
Even amateurs who had never invested before were willing to buy his company shares!
Everything he touched turned into gold, helping him pave his way to success.
Eventually, Eike Batista held so much power that he could control markets.
His actions and development plans began to influence the economic situation of Brazil
and the government.
He used his selling skills and issued press releases to inform the public about new oil
fields, updates on his companies, new contracts and attracted more investors and buyers.
He had also been able to build himself as a brand and one of the most influential people
in Brazil.
The people of Brazil bowed down to him for making their country into such a significant
economic power.
For example, the local investment house, which managed accounts for investing in Batista's
company, became the world's largest retail investment company at one point from his influence.
His primary company was OGX, and it was estimated at the time that the company was sitting on
oil and gas deposits that were worth more than $1 trillion.
Business was booming, and Eike was shining in the spotlight.
As if this wasn t enough, Batista broke headlines with the news of marrying a Brazilian model,
Luma de Oliveira.
He was always an attraction for the media, and in 2012, he was listed as the 7th richest
man in the world.
What a huge accomplishment!
But that wasn't enough for him; the motivated and determined individual, hungry for more,
claimed that he was going to become number one by 2015.
However, fate had something else planned for him.
So What happened to Eike Batista in 2022?
Years and years of success, money, fortune and then all of a sudden watching all that
go down the drain in a matter of months!
Indeed, that must ve been something Batista could not have gone through smoothly.
It s even a surprise he s still alive today.
Imagine yourself climbing up stairs, step by step, and you are just six steps away from
the top, and you slip and fall down to the bottom.
In fact, even below the base.
You try to get hold of a railing or anything which could save you and, if not, pull you
back up, but at least help you remain on the stairs, but to no avail.
Obviously, that is something that really has to hurt, and it is precisely what business
tycoon Eike Batista went through especially in 2022 now.
All his companies under the EBX group were not performing well and began to incur massive
debts and losses, one after the other.
Investors stopped believing in him and were demanding their cash back.
The major blow-up occurred when Batista's prized possession, OGX, began to crumble.
The oil fields, which were meant to be valued at trillions of dollars, turned out to be
worthless.
In one day, OGX lost 40% of its market value and Eike Batista ended up losing $7 billion
that day.
So what went wrong?
There obviously isn't one right answer for such a massive downfall, but a number of factors
contributed to this mishap.
The economic crisis in Brazil, a decrease in petroleum prices worldwide, and mismanagement
were all factors that led to the downhill journey.
Batista, however, did not believe that these were the reasons but clearly thought that
it was only due to the stock market.
Critics, however, believed otherwise.
Many stated that Eike Batista was just a bunch of lies and had misguided people with false
information and that he claimed larger oil fields than what they actually were.
Batista had projected that he had a higher amount of oil per annum, and after receiving
investments, the figures turned out to be false.
These over-exaggerated figures and projections of faulty pictures brought his empire to the
ground.
To make matters worse, investigations for catching those criminals who had established
close ties with government members, bribed them and took public benefits for them began.
Eike Batista was found guilty in this case.
By 2015 Eike became the first negative billionaire and was valued at a debt of $1 billion.
He literally became a broke billionaire.
He was arrested two years later.
The years ahead were spent in and out of jail for him, and the rest of the time, he was
placed under house arrest.
He was accused of bribery, money laundering and insider trading.
In 2019, he was arrested again for trading Bitcoin in his Wife s name and today he s
still trying to relaunch businesses to investor skepticism.
Things are still not solved yet in 2021.
He s still being accused of manipulating markets in Brazil, Ireland and Canada and his mining
company MMX was finally declared formally bankrupt in May 2021.
In December 2021 and going into 2022, it was claimed from the Pandora Papers that were
leaked, Eike owed $700 million in taxes.
Ouch.
Other news in 2022 so far, Eike s personal assets are still in the process of being liquidated.
It might be tough for Eike Batista to make a comeback in 2022.
LESSONS LEARNED So, what are the billionaire mistakes we can
learn from?
Although none of us have probably had as volatile of a life as Eike Batista, there are a number
of takeaways that we can learn so we don t have to go through a downturn as dramatic
as his regardless of how much money we have.
These may seem like simple rules, but trust me, easier said than done!
Lesson #1 Diversification You may have heard of the saying, "Don't put
all your eggs into one basket."
Batista had allocated all his resources into one sector, which was oil and mining.
As that went tumbling down with commodity prices falling, so did the rest of his empire
and all his wealth.
To make matters worse, Batista had made personal guarantees to guarantee company loans.
In addition, Batista had taken huge loans at his company.
Leverage always magnifies returns.
So when things went haywire, banks and investors came after his personal assets.
Hence, diversification is essential to be able to grow and maintain your wealth through
good and bad times.
And don t provide personal guarantees to your company or businesses!
We might all need to follow this advice in the Crypto bloodshed of 2022 so far.
Lesson #2: Slow and steady wins the race Patience is an important virtue, and for any
business, there is a fixed rule that a strong foundation is only built with patience and
concrete goals.
It is absolutely okay if others race past you and get ahead; every business has its
own pace at which it grows.
Batista had aimed to become the richest man in the world, and he was willing to go to
any extent to achieve that goal as soon as possible.
Setting realistic goals with the right amount of risk management with facts and figures
to back them up is absolutely compulsory for a business.
Empty promises and lies were made to investors to get rich quick.
Because of that when pieces started to unravel, his empire fell apart quickly afterwards.
That s what happens when trust is broken and credibility is lost.
Lesson #3: Being humble One of the main reasons for Batista's downfall
was his overconfidence in himself.
Watching himself rise to such extents made him think that he was undefeatable and made
him believe that there was nothing that could possibly go wrong in his business.
What he forgot was that luck plays a significant part in success, and if you misuse it in fraudulent
ways, it eventually comes back to get you.
Studies and research have proven that one of the qualities of a successful leader is
being humble and down to earth.
Bill Gates stands as our most remarkable example today.
Rather than boasting and showing off your achievements, it is better to stay humble.
You never know when things could go wrong.
Keep your feet on the ground and remember that you depend on a lot of other factors
to maintain your success.
As Steve Jobs once famously said, Stay Humble and Stay foolish.
Conclusion And that brings us to today.
Now you know the story behind Eike Batista.
Batista had an incredible life as a successful entrepreneur and is now on record of being
the first negative billionaire in the world and as one of many billionaires who are broke.
So with that said, thank you so much for watching my video.
There was a significant amount of research and production that went into making this
video possible, so if you wouldn t mind giving the video a LIKE and leaving a comment in
the YouTube section below, it would really help out a lot.
Do you think it s better to have been rich and lost it all, or to have never been rich
at all?
What do you think of this Brazilian billionaire s life story?
Be sure to check out some of my other videos, like the Rise and Fall and Rise Again of Radio
Shack in 2022 and the Rise and Fall of Jack Ma.
Thank you again for watching and stay tuned for another episode of Company Insight next
week.