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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Oblomov who wrote (110780)	3/17/2008 2:06:28 AM
From: MulhollandDrive	Respond to of 306849

online.wsj.com. Bear Stearns's Plunge Takes Along Billionaire U.K. Investor Lewis Took Big Stake in '07, Lost $800 Million By CASSELL BRYAN-LOW in London and KATE KELLY in New York March 17, 2008 British-born billionaire Joseph Lewis made his fortunes gambling on currencies. But 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 lost about $800 million on his roughly 9.6% stake in Bear, which has seen its shares crater in recent days. [Joe Lewis] 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, deeply disappointed about the stock's performance, are likely to take a hard line in negotiations about the bank's options if there is any flexibility, according to a person familiar with the matter. 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 Florida money-management firm Private Capital Management Inc., a unit of Legg Mason, recent regulatory filings show. Mr. 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 -- closely questioning Bear lead director Vincent Tese about the investment bank's problems last summer, and making his dissatisfaction with Mr. Cayne clear to Bear officials in the weeks preceding Mr. Cayne's early-January resignation as CEO. The value of Mr. Sherman's stake has fallen about 80% over the past year. A representative for Mr. Sherman did not return calls yesterday. Mr. Lewis couldn't be reached. An assistant in Mr. Cayne's Bear office said that he was in a meeting and unavailable for comment. Mr. Barrow didn't respond to a request for comment. <<<<snicker>>>> 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 Bahamas -- and got involved with Bear first as a client and then became a major investor last year. 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 this past summer, shortly after the bank announced that two internal hedge funds had imploded. In December, his stake grew to just under 10% from about 7% when Bear stock fell below $110, forcing him to make good on an options trade he had made with another party. Mr. Lewis could have sold off his obligation to buy and washed his hands of an unlucky trade. But he chose to exercise his options, acquiring hundreds of thousands of new shares. He owns more than 11 million Bear Stearns shares, according to a December regulatory filing. But on 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. The son of a café owner in London's East End, Mr. Lewis started work there and later expanded the family business to create a small empire of themed restaurants. He acquired the nickname "the boxer" in part because his name is similar to boxing legend Joe Louis but 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.