Just when Brazilian entrepreneur Eike Batista was making two steps forward, he was brought 10 steps back. Batista, once the richest man in Brazil and the seventh in the world according to the Forbes list, has now lost half of his $25 billion fortune.
Over the years, Batista has always been "in deal mode," as he himself puts it, launching ventures like a Jeep factory or a cosmetics line and then IMX, an entertainment management business that promotes Ultimate Fighting Championships and Cirque du Soleil performances in Brazil.
But the bulk of Batista's wealth is in his six publicly traded "X" companies, which include MMX (iron ore mining), MPX (energy) , LLX (logistics), REX ( real estate), OSX (shipbuilding), and the most prized asset OGX for oil and gas. In the year 2010, these companies let him cash in $21.4 billion, which in more comprehensible terms is equivalent to $58 million a day or $580 a second.
Recently for Batista, however, bad news just keeps coming. Most of his companies are facing delayed projects and missed production targets, and these problems are compounded by the falling price of crude oil (which drove some of his companies' share value to plummet). Needless to say, the devaluation of the Brazilian currency itself has pushed Batista down further.
Worse than that is his loss of credibility, as Batista’s ability to entice investors has faded. His company OGX Petróleo e Gás, for example, has become the second-most shorted stock in Brazil (shorting a stock is like betting against it, where investors benefit from its declining value). Even credit agencies have lowered his companies' ratings to B- , making it increasingly difficult for Batista to raise capital and meet project deadlines.
Recently, a Brazilian newspaper reported that OSX had defaulted on its loans and that the government might step in to handle the funding gap. More likely though, Batista’s “X” empire may not live to see the generosity of state-controlled banks, given the protests that have occurred in Brazil about the 2014 FIFA World Cup budget.
Meanwhile, Batista’s net worth is down to $9 billion, and on that note it seems like his aspirations to top Mexican telecom tycoon Carlos Slim ($68 billion) and American business magnate Bill Gates ($73 billion) will have to wait.