Daniel Loeb Expose: 10 Bombshells Revealed
Among the revelations in a new Vanity Fair piece about the activist investor is that he allegedly once hit a young Cuban kid with his car and was unable to leave the country.
Activist investor Daniel Loeb isn't shy about attacking CEOs.
Just in the past couple months alone, he's made headlines after going after both Sony and Sotheby's. But on Wednesday, an expose on Loeb appeared on Vanity Fair's website, where it was revealed some unflattering things about Loeb's own background, including that that he once hit a young kid with his car and was detained in Cuba.
Here are the 10 biggest revelations from the story:
1. He allegedly hit a young Cuban kid with his car.
In March 2002, Loeb, now 51, traveled to Cuba with fashion designer Diane von Furstenberg son, Alexander. According to Robert Chapman Jr., a hedge-fund manager who was once friends with Loeb and invested with him, Loeb called him, emotional and crying, saying there had been an accident and he was confined to his hotel. "I remember how scared Dan sounded when describing the incident involving his hitting a local Cuban kid with his car," Chapman told Vanity Fair. "I truly felt so sorry for him when he told me he had found himself unable to leave the country, curled up in a ball on the floor of his room crying, promising God that he'd do anything if the Almighty got him out of his predicament. It wasn't as if Dan had done it on purpose, and who really knows what ended up happening to the kid?" Vanity Fair reported that Loeb previously said he had a legal hearing in Cuba and had to stay in the country for a couple more weeks, but that was the end of it.
2. He had an early interest in investing and took a big hit when he first started out.
He began playing the stock market when he was a student at Columbia University and had amassed $120,000 in cash by the time he graduated. He sunk it all into Puritan-Bennett, which makes medical equipment, and later lost everything after reports surfaced that the company's anesthesia machines were linked to the deaths of a few patients. Afterward, he owed his father $7,000, and it took him 10 years to pay that money back.
3. He began attacking CEOs early in his career.
In 1995, he formed his Third Point hedge fund and began attacking CEOs on websites under the pseudonym "Mr. Pink," which was the name of a character in Quentin Tarantino's 1992 film Reservoir Dogs, in the hopes their stock would plummet. He first targeted the Internet company Hitsgalore.com, which was trading under the symbol HITT. “These crooks belong in jail," he wrote, calling the company "sHITT." Hitsgalore sued him, and Loeb admitted in an affidavit that he was the person behind "Mr. Pink."
4. His competitors describe him as "Napoleonic" and "Machiavellian."
Chapman likens Loeb's interest in yoga and the Torah to a form of atonement. "I've heard it said that yoga is Dan’s form of paying penance for what he does while outside the home, whether it be the office or elsewhere," he says. "It's like his way of self-purging." Adds a competitor: "I think Loeb has got an enormous ego. I think he’s got a bit of a Napoleonic thing. And I think he's a very calculating, Machiavellian guy. . . . What happens to some people when they make a ton of money is they get this feeling of invulnerability, and I can do anything, say anything, behave any way I want, and I can get away with it."
5. Despite his success, he's perceived as insecure.
"Given Dan’s extraordinary success, his behavior can be extraordinarily odd, and coming from me that says something," Chapman says. "If I had to guess, he sees himself as a phenomenal filterer of other people's investment ideas, and maybe that's the source of a behavior normally attendant on someone hopelessly insecure."
6. He tried to get Nikki Finke fired multiple times.
In August, Finke reportedly wrote a post on her blog in which she called Loeb "the putz [who] created chaos and confusion inside a stable and successful studio," referring his attack on Sony. She also called upon Hollywood to boycott Variety, in which Loeb owns a 25 percent stake, "by not reading or advertising" in it. (Jay Penske owns both Deadline Hollywood and Variety.) The post reportedly was removed from the site, and a source told Vanity Fair that Loeb tried to get Finke fired at least three times.
7. He's allegedly lied about his background.
When he first moved to New York, he claimed he was a member of the "Our Crowd" Loeb family. ("Our Crowd" is a group of upper-class Jewish families who thought of themselves as elite and would only marry within the group.) That particular Loeb family owned the investment house Kuhn Loeb. "He was not from hunger, but he was not a Loeb," says an anonymous source who apparently called him out on his background.
8. He will "make up s--t" to get what he wants, says a colleague.
One of Loeb's longtime colleagues appears to be abhorred by his behavior, saying Loeb "can write the most obnoxious letters on the planet, make up shit -- [because he does] not really care … whether or not you hurt people or don’t hurt people. You just don’t care. The only thing you care about is making money on their stock. . . . [His letters] were juvenile, sophomoric, and cringe-making. Horrible. If you’re a decent member of society you [don’t do] shit like that. But he did. That was his business strategy. He was very smart. Because other people -- most of us -- have certain values and certain norms, and there are certain boundaries we just won’t cross. And he just obviously doesn’t have those same kind of limitations. Never has."
9. He's perceived as a hypocrite.
Writes Vanity Fair: "These days he is living large with perks that dwarf the ones he has mocked other executives for awarding themselves." According to Forbes, Loeb's net worth is valued at $1.3 billion. Among his properties are a Manhattan penthouse at 15 Central Park West that he paid $45 million. The 10,674-square-foot is located on the 39th floor and features five bedrooms. In East Hampton, he owns a waterfront house designed by architect Rafael Viñoly. He also has a home in Aspen and a condo in Miami Beach along with a 200-foot yacht, which he bough earlier this year for about $52 million, and a Gulfstream IV, according to Vanity Fair. His homes and Park Avenue office also include works of art by the likes of Jean-Michel Basquiat, Richard Prince, Cindy Sherman, Andy Warhol and Mike Kelley.
10. He has a surprising background, including a friendship with rapper Fab 5 Freddy and a great-aunt who invented the Barbie doll.
Loeb grew up in Santa Monica Canyon, north of Los Angeles. He was a regular surfer at Third Point, the break located at Malibu's Surfrider Beach. He often takes his private jet to the Mentawai Islands, in Indonesia, to go surfing. And when he was 12, he made skateboards for himself and his friends. He also has practice Ashtanga, a rigorous form of yoga, and competed in triathlons and marathons. Post-college, Loeb worked for Island Records. He also apparently was friends with Fab 5 Freddy during the 1980s. His great-aunt Ruth Handler created the Barbie doll and founded Mattel with his great-uncle Elliot Handler. His father, Ronald, was a partner in the L.A.-based law firm Irell & Manella, while his mom, Clare, wrote her Ph.D. dissertation on Herman Melville."It's pretty stunning to me, unreal," says Loeb's mom of the fact that her son is now a billionaire.