As you may have heard, over at Vanity Fair today you will find a profile of hedge fund manager Dan Loeb by William D. Cohan, titled “Little Big Man.” It’s kind of unflattering! Among other things, Loeb is described, by his peers, as “Machiavellian,” being possessed of a “Napoleonic” complex, and “the Kanye [West] of Wall Street.” With the exception of his mother and Anthony Scaramucci, none of the people quoted re: Loeb’s character had very nice things to say, instead noting that:
- “He is just long and loud. He took a position and then started screaming and trying to force some change.”
- “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.”
- “He never, ever in a million years would have written these [Bloomberg] posts back in 2008 when he was down nearly 50 percent and nearly blew up. That was a humble Dan Loeb, who never would have gone out making enemies needlessly.”
- “The guy almost went out of business in 2008. . . . I think what happened was he had a good couple of years. He bounced back. He put up some good numbers, and I just think his ego has gotten so out of control. . . . With the fund doing well, I just think it’s completely gone to his head, and he surrounds himself with a bunch of sycophants.”
The person who has the most to share, though, is Loeb’s former friend Bob Chapman* (who is not so different from Loeb in his love of laying into CEO’s and dialing into earnings calls to ask companies to comment on alleged ‘ass rapings’). The most amusing part of Chapman’s commentary on all things Loeb is his habit of adding a back-handed compliment or striking a self-deprecating note to soften each of his mildly to majorly devastating blows:
On Loeb only having one skill, which Chapman would trade his many skills for:
“Here’s the thing about Dan,” he says. “He’s smart not in the way of some 180 I.Q. kid from M.I.T. who immediately grasps complex derivatives or investment scenarios. His brain is not wired that way. However, he does have unparalleled judgment on when, why, and how much capital to deploy into a particular investment—what’s going to work and what’s not going to work. Believe me, I’d rather have that one instinct than all of mine combined.”
On Loeb surpassing the bar Chapman says he himself set for acting like a prick.
Some people think Loeb’s hostile behavior may derive from feelings of insecurity. “Given Dan’s extraordinary success, his behavior can be extraordinarily odd, and coming from me that says something,” says Chapman. “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.”
On that time Loeb supposedly called Chapman crying after being detained in Cuba for hitting a kid with his car, an incident during which Chapman’s heart truly went out to the guy, who Chapman is pretty certain would never have intentionally run down a child. He’s a monster, sure, but he’s not mowing over locals for kicks!
In March 2002 there was a strange blip in Loeb’s biography, when he traveled to Cuba with his friend Alexander von Furstenberg (son of the designer Diane von Furstenberg, a Vanity Fair contributor) for what was supposed to be a long weekend. Things unexpectedly took a dark turn, and according to a lawsuit later filed by Youlia Miteva, a former Third Point analyst who accused Loeb of breach of contract, among other things, “Cuban authorities had refused to allow him to leave.” Asked what had happened in Cuba, Loeb told me earlier this year, for a previous Vanity Fair story, that he had been involved in a car accident, stuck around for a couple more weeks, had a legal hearing, and everything turned out fine. But, according to Chapman, a desperate and sobbing Loeb had called him from Cuba, where he was confined to his hotel after the accident. “I remember how scared Dan sounded when describing the incident involving his hitting a local Cuban kid with his car,” recalls Chapman. “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?”
Obviously there’s a lot here that Loeb and/or his representatives might not be happy with, but it’s the last anecdote that really got his lawyer fired up, particularly as it ate into his time in the City of Light.
Loeb’s friend, art dealer Christophe Van de Weghe, insisted to the Post: “I was with Daniel Loeb in Cuba at the time of the accident and the period following. I state categorically that Daniel was never in jail . . . and that the child involved in the accident was not killed. These statements are malicious and defamatory.” The incident is also described in Michael Gross’ upcoming book, “House of Outrageous Fortune.” Gross writes, “He’d been in a car crash, and that he’d ended up in jail until he was bailed out by another financier” after seven weeks. Loeb’s pompous lawyer Matthew S. Dontzin said: “The statements you attribute to Mr. Chapman, Gross and an ‘unidentified source’ are entirely untrue, defamatory and libelous, and will be treated as such . . . I am in Paris and I don’t have any more time to talk to you, lady.”
*Somewhat related, best WSJ correction ever goes to:
CHAPMAN CAPITAL LLC didn’t state in a 13D filed with the Securities and Exchange Commission that it had earned $1.4 million from trading in Footstar stock. The $1.4 million estimate in a Jan. 28 Money &Investing article actually was taken from an article on TheStreet.com and should have been attributed properly. Chapman Capital hasn’t specified the correct number. The offices of Robert Chapman, head of the firm, aren’t decorated with sharks teeth and he doesn’t liken himself to the fictional characters Darth Vader and the Terminator, as incorrectly stated in the Jan. 28 article. The article incorrectly attributed certain comments to a representative of the firm who had been identified as Robert Lewis; after publication, Mr. Chapman said he had made those comments himself.”