what yacht was used in wolf of wall street

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How Jordan Belfort's 37m superyacht Nadine sank off the coast of Sardinia

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Coco Chanel was famously outspoken on many things, but yachting, in particular, attracted her ire. “As soon as you set foot on a yacht you belong to some man, not to yourself, and you die of boredom,” she was once quoted as saying.

Her solution was to buy her own yacht. A 37m with a steel hull, built by the Dutch yard Witsen & Vis of Alkmaar. The yacht passed through many hands, finally ending up belonging to the Wolf of Wall Street, Jordan Belfort, on whose watch she foundered and sank in 1996.

The yacht was originally built for a Frenchman under the name Mathilde , but he backed out and she caught Chanel’s eye instead. With a narrow beam, a high bow and the long, low superstructure typical of Dutch yachts of her era, she was certainly a beautiful boat. But she was also well equipped, with five staterooms in dark teak panelling, magnificent dining facilities, room for big tenders and, later, a helipad. A frequent sight along the Florida coast, she caught the eye of a young skipper called Mark Elliott.

“In those days, she was the biggest yacht on the East Coast,” he remembers. “Nobody had ever seen anything like it. I needed a wrench once and went up to the boat - Captain Norm Dahl was really friendly.” He didn’t know it then, but Elliott was destined to become the skipper of the boat himself and was at the helm when the storm of the century took her to the bottom off Sardinia.

Coco Chanel died in 1971 and sometime thereafter the yacht was renamed Jan Pamela under the new ownership of Melvin Lane Powers. He was a flamboyant Houston real estate developer, fond of crocodile skin cowboy boots and acquitted of murder in a trial that gripped the nation.

Powers sent Jan Pamela to Merrill Stevens yard in Miami, where a mammoth seven-metre section was added amidships. “We made templates for the boat where we were going to cut her in half, then she went out for another charter season,” remembers Whit Kirtland, son of the yard owner. “When the boat came back in, we cut it just forward of the engine room, rolled the two sections apart and welded it in.”

He remembers how the sun’s heat made the bare and painted metal expand at different rates. “You had to weld during certain time periods – early in the morning or late at night,” says Kirtland.

The result of the extension was a huge new seven-metre full-beam master stateroom, an extra salon and one further cabin – pushing the charter capacity to seven staterooms. During this refit, the boat’s colour was also changed from white to taupe. “No one had really done it before and it was gorgeous,” says Elliott. By 1983, Powers was bankrupt and the yacht was sold on again. She next shows up named Edgewater .

Elliott’s chance came in 1989. He was working for the established yacht owner Bernie Little, who ran a hugely profitable distribution business for Bud brewer Anheuser-Busch. “Bernie Little had always wanted to own the boat,” Elliott says. “He loved it. He bought it sight unseen – and I started a huge restoration programme, including another extension to put three metres in the cockpit.”

It was a massive task, undertaken at Miami Ship. “We pulled out all the windows, re-chromed everything, repainted – brought it back to life,” says Elliott. They also cut out old twin diesels from GM and replaced them with bigger CAT engines, doubling her horsepower to 800. “Repowered, she could cruise at up to 20 knots. She was long and skinny, like a destroyer.”

A smart hydraulic feature was also brought to life for the first time. Under two of the sofas in the main stateroom were hidden 3.6m x 1.2m glass panels giving a view of the sea under the boat. At the push of a button, the sofas lifted up and mirrors above allowed you to gaze at the seabed – from the actual bed.

Now called Big Eagle , like all of Little’s boats, she was a charter hit and her top client was a certain New York financier named Jordan Belfort. He fell in love with her and begged Little to sell to him. But he needed to secure financing, and in 1995, Little agreed to hold a note on the boat for a year if Mark Elliott stayed on as skipper.

With the boat rechristened Nadine after his wife, Belfort set about another round of refit work, restyling the interior with vintage deco and lots of mirrors, extending the upper deck this time, and fitting a crane capable of raising and stowing the Turbine Seawind seaplane.

Nadine also carried a helicopter, a 10m Intrepid tender, two 6m dinghies on the bow, four motorbikes, six jetskis, state-of-the-art dive gear. “You pretty much needed an air traffic controller when all these things were in the water,” says Elliott.

Belfort’s partying was legendary and Elliott clearly saw eye-watering things on board, but as far as he was concerned, he was there to safeguard the boat. “When Jordan Belfort became the owner, he could do whatever he wanted. I was there to protect the note,” says Elliott. “He is a brilliant mind and a lovely person. It was just when he was in his party mode, he was out of control.”

Nadine and her huge cohort of toys and vehicles plied all the usual yachting haunts on both sides of the Atlantic. But Belfort’s love story was to be short-lived. Disaster struck with the boss and guests on board during an 85-mile crossing between Civitavecchia in Italy and Calle de Volpe on Sardinia.

What was forecast to be a 20-knot blow and moderate seas degenerated into a violent 70-knot storm with crests towering above 10.6m, according to Elliott. Wave after wave pounded the superstructure, stoving in hatches and windows so that water poured below and made the boat sluggish. By a miracle the engine room remained dry and they could maintain steerage way, motoring slowly through the black of the night as rescue attempt after rescue attempt was called off.

Nadine eventually sank at dawn in over 1000m of water just 20 miles from the coast of Sardinia. Everyone had been taken off by helicopter, and there was no loss of life. Captain Mark Elliott was roundly congratulated for his handling of the incident. “The insurance paid immediately because it was the storm of the century,” he says. “I took the whole crew but one with me to [Little’s next boat] Star Ship . That was my way to come back.”

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The Real Story Behind the Yacht in The Wolf of Wall Street

Based on the eponymous memoir, the 2013 hit The Wolf of Wall Street told the story of Jordan Belfort, a former stockbroker who was convicted of securities fraud and money laundering. Directed by Martin Scorsese and starring Leonardo DiCaprio, the movie was a smashing success through and through. Amongst its many impressionable scenes, one of the most memorable ones was the yacht party, where Belfort and his colleagues indulged in lavish excess. However, Belfort’s ex-wife, Nadine Caridi, has now spoken out about the real story behind the yacht.

Nadine Caridi, the Ex-Wife

Caridi, who was portrayed in the movie by Margot Robbie, gave an interview in which she revealed that the yacht scene was not entirely accurate. According to Caridi, the yacht that was shown in the movie was not the one that Belfort actually owned. Instead, it was rented for the filming of the scene. In reality, Belfort owned a different yacht called Nadine. Caridi claims that the yacht was named after her and that she played a significant role in its design and decoration. She says that the yacht was much smaller than the one shown in the movie, but it was still luxurious and served as a symbol of Belfort’s wealth.

The Sinking of the Nadine Yacht

Nadine Caridi recently spoke about the sinking of the yacht in June 1996, an event that inspired a scene in the movie. The yacht’s sinking during a storm off the coast of Italy was a terrifying experience for everyone on board. The waves were violent and relentless, hitting the yacht repeatedly. Rescue services had to be called in to rescue the passengers and crew, including Belfort and Caridi. In a recent TikTok video, Caridi shared real-life footage of the rescue, showing the fear and chaos that ensued during the storm, while expressing gratitude that everyone survived.

Can a Circle of Salt Paralyze a Self-Driving Car?

Autonomous vehicles are truly within the grasp of humankind. But the brain of a sci-fi geek can wonder whether it’ll bring an apocalyptic scene, where a troop of autonomous cars is pursuing human prey across a desolate landscape. Well, of course, it’s not going to happen, but luckily, if it did, there’s a strangely simple solution for that. And it involves nothing but salt!

The Salt Trap

Back in 2017, artist James Bridle demonstrated how an understanding of road markings using salt could paralyze a self-driving car midway by delivering confusing messages. You need to draw two circles of salt, one in a block line and the other in broken stripes. When the car comes to the middle of it, the markings will direct it to go right ahead and also not to cross, simultaneously. The result is the fabulous “Autonomous Trap 001.” Future models may be able to overcome this fun technological quirk, but it has surely raised a valid question about the possibility of the success of the trick. It’s astonishing to find out that there may be a simple way to manipulate the environment to disrupt the self-driving capacity of an autonomous car.

The Response

This salt circle trap has caught the attention of none other than Elon Musk, the Tesla boss and newly-appointed CEO of Twitter. As an avid enthusiast, Musk is known for dabbling in autonomous vehicles. Responding to the demonstration, he explained that the salt circle trick will probably be able to trap a Tesla car with the production Autopilot build. But he suspected that it won’t work its magic on the FSD models or the cars with Full Self-Driving capabilities. Musk further suggested that making a ring of traffic cones would be effective on the FSD cars. So, if you ever find yourself facing a murderous fleet of autonomous cars, all you need to do is just take your salt bags and traffic cones out! Easy-peasy, right?

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Jordan Belfort Yacht: The True Story and The Wolf of Wall Street Version

The true Jordan Belfort yacht story is as strange and unbelievable as the hit movie The Wolf of Wall Street depicts it to be. There are several insider stories behind the sinking of the mighty yacht that are not widely known but are quite interesting and different from the reel version in several ways.

What happened to the Jordan Belfort yacht Nadine?

As the movie, The Wolf of Wall Street shows, the superyacht Nadine sank close to the coast of Sardinia in 1997 while battling what many calls “the storm of the century”. Jordan Belfort narrates the event in detail in the memoir describing his life in the 90s, which is what the Martin Scorsese movie is about.

Before getting into the details of the sinking, it is worth noting that the 37m yacht had a long and interesting history. She carried renowned celebrities like Coco Chanel before reaching Jordan Belfort (played by Leonardo DiCaprio in the movie) and was one of the largest yachts in the East Coast’s waters.

While the yacht was initially manufactured for a French native and given the name Matilda, he backed out of the deal. This led Coco Chanel to buy the beautiful yacht with the low superstructure that Dutch yachts are famous for.

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The yacht took on different names as it passed through famous hands, even those of the murder trial acquitted Melvin Lane Powers. Belfort named the yacht after his wife and renovated it with the capacity to carry a helicopter, 6 Jetskis, 4 motorbikes, and much more. Under Belfort’s ownership, the yacht witnessed a series of wild parties that were like unlimited glamour and fun in a package until disaster struck unexpectedly.

Did the yacht scene in The Wolf of Wall Street actually happen?

The Jordan Belfort yacht sinking scene in The Wolf of Wall Street was heavily inspired by a real-life event, though the movie did take some creative liberties. For one, the yacht was called Naomi in the reel version since the name of Belfort’s wife (played by Margot Robbie ) was changed in the movie. In reality, the yacht was named Nadine.

The movie further depicts Belfort’s helicopter getting thrown off the yacht by strong waves. In reality, the yacht’s crew went up to the deck and pushed off the helicopter so that Italian navy seals would have a space to land. The yacht’s itinerary was altered a bit by the movie’s director Martin Scorsese to add to the drama, though the power of the storm was scarily accurate.

Belfort admitted that the yacht’s captain Mark Elliot explicitly warned them not to sail to Sardinia on that fateful night. But according to the movie, there was a business opportunity in the city that Belfort could not bear to miss out on despite his wife’s protests.

Some sources claim that in reality, the passengers were simply eager to hit the golf course at Sardinia the next morning. They refused to pay heed to the captain’s warning and asked him to go through the storm, which eventually led to the famous Jordan Belfort yacht sinking incident. Therefore, unfortunately, if someone wants to have a yacht rental in Dubai or any other destination, they have missed their chance with this yacht.

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Interesting insights on the sinking as portrayed in the movie

The movie captures the fear and stress that each passenger felt when the yacht got caught up in the 70-knot storm. There is some hilarity when Belfort starts yelling for his drugs to avoid the horror of dying sober.

Several rescue attempts were made, but due to rising risks, each of them was called off. By some twist of luck, the yacht’s engine room remained mostly undamaged for a while, because of which they were able to make their way through the sea.

In the end, everyone survived the incident without any major injuries. At dawn, the Nadine made its way 1000m under the water only 20 miles away from Sardinia’s coast. Now, the movie’s audience gets to watch the Jordan Belfort yacht story unfold on the screen with a pinch of humor.

The Nadine’s captain Mark Elliot’s heroic actions did not go unnoticed. He was praised for leading all the passengers to safety, though he was able to get out of the yacht only 10 minutes before it sank. The captain also admitted that the insurance was granted immediately considering the ferocity of the storm. As for the yacht, many still wonder about the highly expensive equipment that had to be thrown into the water and is probably rusting away at the bottom of the sea.

The best features of the Jordan Belfort yacht Nadine

The 167 ft Nadine, as its former passengers claim, was a beautiful yacht. When owned by Coco Chanel under the name Matilda, the yacht had five staterooms, large dining areas, and a helipad. The interiors were furnished with dark teak paneling. Each new owner customized the yacht’s name and interiors based on their tastes.

Belfort decorated the Nadine lavishly with a variety of mirrors and set a vintage deco theme. He renovated the upper deck to fit a crane that was able to stow his Turbine Seawind seaplane. The yacht carried the best dive gear available in the market plus a variety of Belfort’s ‘toys’ such as his motorbikes and jetskis.

Which model was portrayed as the Jordan Belfort yacht Nadine in the movie?

Martin Scorsese got the yacht Lady M to represent Nadine onscreen. While Nadine actually had a luxuriously vintage charm to it, Lady M is a modern vessel with contemporary features. Lady M was manufactured in 2022 by Intermarine Savannah, while Nadine was built in 1961 by Witsen & Wis. The 147 ft Lady M is currently worth $12 million and is similar to Benetti yachts in its glamorous design.

Jordan Belfort’s life today

The entrepreneur and speaker Jordan Belfort’s shenanigans are well-known thanks to his detailed memoir and the hit movie based on some parts of his life. He spent 2 years in prison and now, at 59 years of age, has a practically negative net worth. Yet, his extraordinary motivational speaking skills continue to attract and inspire people even today.

It is easy for anyone watching the movie to wonder if many of the incidents are exaggerated. But considering Belfort’s eccentric life, even the Nadine sinking incident remains another regular anecdote shared in the movie.

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Jordan Belfort Yacht: The True Story and The Wolf of Wall Street Version

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The true Jordan Belfort yacht story is as strange and unbelievable as the hit movie The Wolf of Wall Street depicts it to be. There are several insider stories behind the sinking of the mighty yacht that are not widely known but are quite interesting and different from the reel version in several ways.

Nadine yacht model

What happened to the Jordan Belfort yacht Nadine? As the movie, The Wolf of Wall Street shows, the superyacht Nadine sank close to the coast of Sardinia in 1997 while battling what many calls “the storm of the century”. Jordan Belfort narrates the event in detail in the memoir describing his life in the 90s, which is what the Martin Scorsese movie is about.

Jordan belfort yacht sailing

Did the yacht scene in The Wolf of Wall Street actually happen? The Jordan Belfort yacht sinking scene in The Wolf of Wall Street was heavily inspired by a real-life event, though the movie did take some creative liberties. For one, the yacht was called Naomi in the reel version since the name of Belfort’s wife (played by Margot Robbie) was changed in the movie. In reality, the yacht was named Nadine.

Interesting insights on the sinking as portrayed in the movie

The movie captured each passenger’s fear and stress when the yacht got caught up in the 70-knot storm. There is some hilarity when Belfort starts yelling for his drugs to avoid the horror of dying sober. Several rescue attempts were made, but each was called off due to rising risks. By some twist of luck, the yacht’s engine room remained undamaged primarily for a while, because of which they were able to make their way through the sea.

The best features of the Jordan Belfort yacht Nadine

The 167 ft Nadine, as its former passengers claim, was beautiful. When owned by Coco Chanel under the name Matilda, the yacht had five staterooms, large dining areas, and a helipad. The interiors were furnished with dark teak paneling. Each new owner customized the yacht’s name and interiors based on their tastes.

Which model was portrayed as the Jordan Belfort yacht Nadine in the movie?

Martin Scorsese got the yacht Lady M to represent Nadine onscreen. While Nadine had a luxuriously vintage charm, Lady M is a modern vessel with contemporary features. Lady M was manufactured in 2022 by Intermarine Savannah, while Nadine was built in 1961 by Witsen & Wis. The 147 ft Lady M is currently worth $12 million and is similar to Benetti yachts in its glamorous design.

Jordan Belfort’s life today

The entrepreneur and speaker Jordan Belfort’s shenanigans are well-known thanks to his detailed memoir and the hit movie based on some parts of his life. He spent 2 years in prison and now has practically negative net worth at 59 years of age. Yet, his extraordinary motivational speaking skills continue to attract and inspire people even today. It is easy for anyone watching the movie to wonder if many of the incidents are exaggerated. But considering Belfort’s eccentric life, even the Nadine sinking incident remains another regular anecdote shared in the movie.

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Watch: Real ‘Wolf Of Wall Street’ Jordan Belfort Tells The Crazy Yacht Trip Story, Explains The Phases Of Quaaludes & More

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While the real Jordan Belfort has said he won’t be making any money off the film adaptation of his memoir “ The Wolf Of Wall Street ,” one can only imagine that the man who makes his current living as a motivational speaker, will earn a boost in folks curious to hear what he has to say following the movie. And with the stories he’s accumulated from his hedonistic days in the financial game, it’s no wonder that Belfort is an engaging raconteur, and this 13-minute video from a few years back proves it.

One of the wildest sequences in a film already filled with unbelievable, outrageous acts, is Belfort’s European yacht trip which starts in sun dappled Italy and soon finds drugs, disaster and near death looming for everyone involved. It’s one of the moments in “The Wolf Of Wall Street” where you wonder if it really happened, but to hear Belfort himself tell the tale, it’s so outlandish it just has to be true. In a conversation with The Room Live  (via Reddit ) Belfort shares the entire story from beginning to end, even detouring slightly to explain the phases of being high on quaaludes. Yes, really.

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Meanwhile, back in November we had the chance to talk with the film’s screenwriter,  Terence Winter , who revealed that the “ Goodfellas ” template is one that ‘Wolf’ didn’t veer too far from. “It is very much [in that vein],” he explained. “It’s sort of written in the same style, voice-overs, it’s a very fast movie, it’s really a wild roller coaster ride.” And now with film in theaters, director Martin Scorsese elaborated and defended his choice of approach.

“If you’re gonna use a voiceover to tell people what’s missing, that’s cheating in a way, right? But if you use it for other reasons—if you use it for commenting [as in Wolf], ‘Brad died at the same age as Mozart. I don’t know why that came to mind. It doesn’t matter.’—I mean, that’s interesting. It’s about character. It’s about speaking. It takes you into the story,” he told THR . 

“I guess it’s a way of exposition. That’s kinda the key, in a way. Look, I’ve done it, you know? We’ve done it at times. And sometimes, by the way, you can do the exposition and just get away with it; it’s extraordinary just being able to do it, flat, straight out, move on, because there are more important things than specific exposition. And then there are some kinds of exposition that you get stuck in…” he continued. “So maybe it’s better to avoid it completely and just try to find other ways. But the voiceover work that I like is voiceover about character. He could be listing everything he owns and cares about, but it’s more about him—him or her, you know? It’s not about what an IPO is, for God’s sakes. [In Wolf the character of Belfort starts to explain what an IPO is and then acknowledges that the audience isn’t following what he’s saying.]”

All we know is that while Leonardo DiCaprio does a good job in channeling Belfort’s self-destructive energy, there’s no better narrator than the man himself, so check out his insane story below. 

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Charter Yacht 'LADY M' featured in new ‘Wolf of Wall Street’ Film

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By Editorial Team   6 January 2014

The 45m/147’ charter yacht 'LADY M' is the setting for a number of scenes shot with Leonardo DiCaprio for his new Martin Scorcese-directed film ‘Wolf of Wall Street’.

Scenes on board motor yacht LADY M were filmed in North Cove Marina, New York for the highly-anticipated movie due out in cinemas later this month. ‘Wolf of Wall Street’ is based on the rise and fall of high-flying, fast-living real life stock broker Jordan Belfort, played by DiCaprio as he raked in more than $50 million a year on the stock market.

Belfort set up boiler room Stratton Oakmont in the 1990’s and enjoyed an outrageously excessive lifestyle of drugs, women, planes and of course superyachts before being imprisoned for 22 months corruption and fraud.  LADY M is used in the film to represent Belfort’s own superyacht ‘NADINE’, named after his second wife, which was a 41m luxury motor yacht originally built for Coco Chanel in 1961.

‘NADINE’ sank in July 1997 following an instruction from Belfort while he was high on drugs to the Captain to head into a storm on a cruise from Porto Cervo to Capri. The yacht was battered by 15m waves and sank along with a number of toys including a seaplane, helicopter and eight jet skis however all passengers were successfully rescued by the Italian Coast Guard.

Built in 2002 by Intermarine Savannah , LADY M made for a luxurious setting for the film with her classically elegant interior that offers accommodation for up to 10 guests in five staterooms comprising a master suite, VIP, two doubles and one twin cabin. She is offered for charter at weekly rates starting from $125,000, contact your yacht broker for more details. 

'Wolf of Wall Street’ yacht scenes were filmed on board LADY M in North Cove Marina, New York for the highly-anticipated movie due out in cinemas later this month.

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Jordan Belfort’s ex-wife tells the real story behind the yacht on The Wolf of Wall Street

The ex-wife of jordan belfort shed some light on the infamous scene.

Ben Thompson

Jordan Belfort's ex wife, Nadine Macaluso, has set the record straight about the scene in The Wolf Of Wall Street where Belfort splashes out and buys his wife a yacht on their wedding day.

I mean, when you have a lot of money , what better way to treat your new spouse after saying I do?

After their lavish wedding, Belford ( Leonardo DiCaprio ) covers Nadine's, or Naomi as she's known in the movie, eyes with a blindfold before revealing the huge yacht, which has been christened the 'Naomi'.

And Naomi (played by Margot Robbie ) cannot contain her excitement.

"Are you serious? A f***ing yacht?!" she exclaims.

However, it seems that the real Belfort wasn't very serious, as Macaluso revealed on TikTok that her ex-husband, who she was married to from 1991 to 2005, 'did not' actually buy her a boat on their wedding day.

She said: "Actually what happened I think we were married for a few years and we were always chartering yachts, because he loved to do that.

"And I had given birth to my beautiful daughter Chandler and he said 'I want to buy a yacht'."

However, this idea didn't sit well with Macaluso at the time.

She continued: "I said 'I don't think we should buy a yacht, we have a baby and I don't feel comfortable.

'She can't swim.'

"I had visions of her falling off the boat and I was actually terrified.

"I did not want to buy the yacht ironically. And he was like 'Nope, I'm buying a yacht and I'm calling it the Nadine'. And I was like 'Okay, here we go'.

"And you know how that went."

Macaluso's final line is a nod to a scene in the film, in which Belfort and Naomi need to be rescued from the yacht after it gets caught up in a storm.

This scene was indeed based on the real life sinking of the ship in June 1996, which resulted in a rescue by the Italian Navy Special forces.

The yacht was sunk after violent waves repeatedly hit it, but luckily everyone on board was able to escape the ship in time.

Macaluso has previously commented on the scene's accuracy , where she admitted in a TikTok video that the yacht sinking scene was 'totally true'.

Speaking of the memory, she said: "It was horrific, horrifying, we were in a squall for 12 to 18 hours and we lived, thank god, for my kids."

She even showed real life footage of her, Belford and their friends being rescued by the Navy.

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Meet The Real Wolf Of Wall Street Superyacht Built For Coco Chanel

The yachting disaster is one of the most dramatic scenes in Martin Scorsese's blockbuster The Wolf of Wall Street , and like many of the tales in the Leonardo DiCaprio flick, it's based on a true story. In real life, predatory tycoon Jordan Belfort bought a yacht in 1993 called Big Eagle and renamed her Nadine , after his English-born second wife. The vessel had been built in 1961 by Witsen & Vis in Holland for fashion icon Coco Chanel, but had undergone many transformations by the time Belfort got his mitts on it. Originally 121 feet long, in the 1970s she was extended by nearly 15 feet, and in 1988 she was cut in half and had another 29-foot section grafted on, finally totaling 167 feet.

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The luxury yacht used in Scorsese's film actually bears little resemblance to the  Nadine , being a far more modern vessel. The director hired the 148-foot  Lady M , built by Intermarine Savannah in 2002 and refit in 2011, for filming. It features luxury accommodations for 10 guests, and a marble and granite interior with gold accents.

In Coco Chanel's day the yacht was mainly used to cruise from Monaco to Deauville for the summer horse racing season. The real  Nadine  sank in 1997 during a storm off the east coast of Sardinia while crossing from Porto Cervo to Capri, much as the movie depicts. Belfort has said that his insistence on sailing in a storm caused the yacht to capsize. Luckily, everyone on board at the time was rescued by the Italian coast guard. 

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The true story of Wolf Of Wall Street’s yacht ‘Nadine’

Jordan Belfort’s antics are so legendary that sinking a multi-million dollar yacht is just another act of depravity that Martin Scorsese manages to weave among The The wolf of Wall Street grotesque film adaptation. Those who know the wolf of Wall Street book will have read Belfort’s account about it in more detail, but the backstory of the superyacht Nadine is a lesser-known tale with unexpected twists.

Despite Jordan’s notoriety for unbridled bacchanalia, Nadine was sunk by natural forces far greater than even the fiercest drinking bout he could muster. In the middle of a pedestrianized Mediterranean cruise, a storm unexpectedly turned into a raging storm with high winds and huge swells to send the pride and joy of the wolf into Davey Jones’ locker.

In fact, this type of storm is so specific that it has its own name. The mistrals get their name from the winds that blow from the French Alps into the Mediterranean. This convection cycle is caused by warm air rising from African deserts and colder air from the Alps rushing through the void for sustained round trips of 12 to 40 hours. Nothing like a strong relentless wind to generate a dangerous swell. And the kicker? Mistrals are difficult to predict.

RELATED: Asymmetric superyacht hits market for $ 47 million

En route from Riva de Travino to the island of Sardinia, off the west coast of Italy, what should have been a routine race (which usually takes around 7 hours) ended in the fiasco that International Yachts described as ‘Mayday in the Med.’

“When we set off,†said Captain Mark Elliot, “the forecast told us to expect wind and choppy but small seas. Knowing that this wouldn’t be an ideal crossing, the captain asked if the guests wanted to delay until the next morning. The answer was a definite ‘no’ as they were all eager to head to Sardinia for a round of golf the next morning. So, they cast off and set sail for another corner of paradise.

Hours later, the guests were enjoying the sunny afternoon weather of another dream day in the Mediterranean… when a rogue wave reached the bow and wheelhouse, inundating a hostess from head to toe. Immediately after this warning sign made contact, a transmission was received via radio warning of unexpected gale force winds in the area. The mistral had announced. The swell heights doubled, the winds intensified, and the shit became real.

However, before Belfort throws next-level parties aboard his elegant ship and charters it across the Mediterranean to Sardinia on that fateful day, Nadine had already lived many lives. In truth, the luxury yacht seen in The Wolf of Wall Street movie bears no resemblance to the period ship owned by Jordan Belfort. Scorsese hired a yacht called Lady M for these stages, which was originally built by Intermarine Savannah in 2002.

On the other hand, the real one Nadine (Where Mathilde as it was originally called), was built in 1961 and delivered by the Dutch shipyard Witsen & Vis for none other than fashion mogul Coco Chanel. At the time, Mathilde had five dark teak cabins, exceptional dining rooms and a helipad.

“At that time, it was the largest yacht on the East Coast,†recalls Captain Mark Elliot. “No one had ever seen anything like it.”

After Coco’s death in 1971 the yacht was renamed Jan Pamela by its new owner, Melvin Lane Powers. While not as decorated as his predecessor, Powers was a notorious and ostentatious Houston real estate developer known for wearing crocodile skin boots and driving a golden Cadillac after being acquitted of the murder of her lover’s husband. The New York Times described his 1966 trial as “one of the most spectacular homicide trials of all time.”

Powers ordered a huge refit and extension of the ship, but in 1983 it hit rock bottom and Jan Pamela was sold before being renamed Waterside . In 1989, it was Bernie Little’s luck, and he bought her sight without seeing her. She then underwent another refit, before becoming Great eagle under the command of Mark Elliot once again. In this form, she caught the attention of Jordan Belfort, who took possession of it in 1995. Of course, he had to undertake his own additions and renovations, before renaming the ship after his second wife, Nadine .

However, the reincarnation of this historic yacht as Nadine was to be short lived. After 35 years of leisure, sailing on the most beautiful coasts and welcoming the great names of the time, Mother Nature would have the last word.

Back in the Mediterranean, hours later, roaring gusts ripped the $ 100,000 tender from its tow lines. Captain Mark Elliot calls to abandon yacht, as turning point Nadine against the crashing waves would have courted disaster. Abandoning the course to try to outrun the mistral was out of the question for the same reasons. They are there now – every captain’s nightmare – with seventy knot winds and 35 foot ridges to negotiate.

Then, Nadine’s The moment of “perfect storm” pointed its formidable head. The huge wave crashes all over the ship, tearing off the hatches and deck fittings, triggering a death knell that can only end with a day of disaster. The remaining supply crashes into the dining room window, causing it to collapse wave after wave flooding the living room.

“I knew at that time that Nadine had received a fatal blow. Once I assessed the damage, I walked over to the deck and used the satellite phone to contact the Italian Coast Guard known as “Gruppo Marine Italian,†says Captain Elliot.

First aid stations. Guests are gathered in a secure central location and escorted one by one to their cabins to collect passports and any valuables that can fit in a small bag.

Half an hour later, a rescue helicopter attempts to bring down a diver to pick up guests. However, the gusts of wind turned out to be too violent, and after almost losing the said diver, the helicopter aborted. Imagine the heartbreaking feeling of those on board Nadine , as the Coast Guard abandon ship, defeated by the rampaging elements, and return to the safety of the coast as the sun sets below the horizon and night sets in.

Hurricane-force winds, severe flooding and a 15-meter-high sea are now pounding Italy’s shores in what will be known as the storm of the century. The situation is so tumultuous that when a large merchant ship attempts another rescue attempt a few hours later, it almost crashes in Nadine , before setting off again and again, abandoning the crew and the frenzied guests.

The liferafts are deployed as a precaution… until the roaring wind also tears them from the sea, leaving the crew completely stranded on board.

Below deck, the flooded kitchen has become an electrified death trap, and the chef and engineer receive jolts from the current before pulling the ass out of there to the (relative) safety above. It should be noted that this is probably around the time when a deranged and drenched Leo shouts at Jonah Hill with the unforgettable line: “Get the ludes downstairs!” I will not die sober! To have. The. Whore. Ludes! ”

Times of crisis. With no options left, Captain Elliot calls to throw the helicopter off the bridge to free up space for another rescue attempt. He unhooks the tie-downs and rolls the ship twenty degrees, throwing the expensive equipment overboard and into the Mediterranean, where its rusty skeleton undoubtedly lies to this day.

At around 5 a.m., the Coast Guard returned and began to hoist the guests, then the crew to safety in the reassuring light of dawn. The weather calmed down as the winds and waves calmed down, but the damage was done. The last to leave the ship he commanded for so many years, Mark Elliot takes stock of the wreck before finally accepting his loss, closing the engine room controls and seizing the buoy rescue package handed to him by the coast guard.

Nadine is swallowed up by the sea, just ten minutes after Captain Elliot left his decks.

While all the guests and the crew of 11 survive, the prestigious motor yacht and its collection of toys (including eight jet skis, four motorcycles, snorkeling gear, a helicopter and a seaplane) sink into the deep end. at the bottom of the Mediterranean, over 1000 m deep. the water.

“The insurance paid off immediately because it was the storm of the century,†said Captain Elliot.

Back on dry land, Mark Elliot was hailed as a hero after showing courage and leadership in such a dire situation. He was then offered command of Bernie Little’s famous yacht Vessel , and today works as a broker in Miami as one of the most experienced and capable men in the business.

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Meet the Real Wolf of Wall Street Superyacht Built for Coco Chanel

The yachting disaster is one of the most dramatic scenes in Martin Scorsese’s blockbuster The Wolf of Wall Street , and like many of the tales in the Leonardo DiCaprio flick, it’s based on a true story. In real life, predatory tycoon Jordan Belfort bought a yacht in 1993 called Big Eagle and renamed her Nadine , after his English-born second wife. The vessel had been built in 1961 by Witsen & Vis in Holland for fashion icon Coco Chanel, but had undergone many transformations by the time Belfort got his mitts on it. Originally 121 feet long, in the 1970s she was extended by nearly 15 feet, and in 1988 she was cut in half and had another 29-foot section grafted on, finally totaling 167 feet.

The luxury yacht used in Scorsese’s film actually bears little resemblance to the  Nadine , being a far more modern vessel. The director hired the 148-foot  Lady M , built by Intermarine Savannah in 2002 and refit in 2011, for filming. It features luxury accommodations for 10 guests, and a marble and granite interior with gold accents.

In Coco Chanel’s day the yacht was mainly used to cruise from Monaco to Deauville for the summer horse racing season. The real  Nadine  sank in 1997 during a storm off the east coast of Sardinia while crossing from Porto Cervo to Capri, much as the movie depicts. Belfort has said that his insistence on sailing in a storm caused the yacht to capsize. Luckily, everyone on board at the time was rescued by the Italian coast guard. 

Jared Paul Stern

Jared Paul Stern, JustLuxe's Editor-at-Large, is the Executive Editor of Maxim magazine and has written for the Wall Street Journal, New York Times, the New York Times' T magazine, GQ, WWD, Vogue, New York magazine, Details, Hamptons magazine, Playboy, BlackBook, the New York Post, Man of the World, and Bergdorf Goodman magazine among others. The founding editor of the Page Six magazine, he has al... (Read More)

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Iconic Scenes: The Wolf of Wall Street – The Yacht Bribe

I love The Wolf of Wall Street . I think it is a spectacular film that seems to grow more relevant as time passes. I also think that the central character and narrator, Jordan Belfort, is not the most important or key character – that is Agent Denham. So I’m looking at the brilliant scene where Belfort and Denham first meet.

What Happens

Multi-millionaire and thoroughly corrupt stockbroker Jordan Belfort invites two FBI agents to his luxury yacht after he learns that they are investigating him. Agent Denham, and a virtually silent partner, arrive for what starts as a very friendly meeting. Belfort hands over some of the information the FBI has been trying to get while constantly trying to impress them with his wealth and insisting he’s done nothing wrong. Belfort draws Denham into a conversation and it seems the FBI agent is not happy at being given the case and would be willing to play ball with Belfort. At which point, Belfort tries to bribe Denham, and then the tone changes. It’s immediately obvious that Denham is not willing to play ball and is determined to bring Belfort down. The conversation gets increasingly acrimonious and ends with Belfort literally throwing lobsters and handfuls of cash at the departing FBI agents.

When you sail on a yacht fit for a Bond villain, sometimes you gotta act the part

DiCaprio is sensational in this scene. Despite getting very good advice not to contact the FBI and try some scheming, this is exactly what Belfort does. They meet on his insanely luxurious yacht, where Belfort has beautiful women lounging on chairs, he is dressed in bright white “yacht clothes” and constantly turning on his beaming smile. He offers them lobsters and drinks. It does not seem to occur to Belfort that showing off his immense, and ill-gotten wealth, might not be the best idea when you’re being investigated for crimes in the stock market.

Belfort’s attempt at bribery is fantastic. Basically detailing a story where he advised someone in need of money in what stocks to invest in and that person making a fortune and how Belfort “would be willing to do that for anyone”. When challenged about this being a bribe Belfort reveals he researched what legally constitutes a bribe and that wouldn’t count. Again, it’s a little suspicious for someone to be able to recite the criminal code of a crime if they’re not a lawyer.

Good for you, Little Man

Oh, Agent Denham, you film stealing hero. Denham is played by Kyle Chandler who, and this is important for the Denham role, is your go-to guy for American decency (if you need someone younger than Tom Hanks), he is probably best known for his role in Friday Night Lights where he played an honourable, upstanding and inspirational football coach. Denham’s casual chatting with Belfort seems to suggest he is not interested in the case and possibly dissatisfied with his job, the attempted bribe being when he flips to his real character.

As Belfort becomes more aggressive Denham responds in kind and leads to one of the all-time best deliveries, “Good for you, little man,” when sarcastically congratulating Belfort on becoming a Wall Street douchebag without any help from anyone else. Belfort is stunned by this comment but mainly in that he can’t understand it…he’s rich, really rich, how can he be a “little man”, he’s a giant. A colossus. The embodiment of the American Dream. The thing is, of course, Denham is right.

Fun Coupons

A lot of this scene is purely about status. Of all the places Belfort could have met with the FBI agents he chooses his insanely expensive yacht. He is obsessed with money and how much the FBI agents make, originally pretending to be sympathetic but quickly changing to just mocking them. Belfort assumes that because Denham works for the FBI for what to him is an insignificant amount of money he is a loser. The idea that Denham might believe in what he’s doing is either inconceivable or at best a pitiable weakness. To me, this is the best and most interesting scene in the whole film – not the drug-filled hedonistic parties, not the cult-like team talks Belfort gives his employees, not the incredibly charismatic phone calls Belfort makes when selling stocks but this scene where Denham sizes up Belfort and sees right through him.

Years ago David Cross and Bob Odenkirk made a sketch show called Mr. Show , which contained a sketch based on the premise “someone who makes more money than you is better than you”, so Van Gogh, Einstein and Galileo are actually pretty unsuccessful people. This is Jordan Belfort’s philosophy – he is better than just about everyone he meets because he is richer.

The Hero I’m Going To Be Back At The Office, When The Bureau seizes this boat!

All Belfort manages to do in this scene is upset the FBI and probably convince them that yes, he is absolutely breaking the law. It’s an interesting look at the dynamic of power in America (and indeed the whole world) – who is the more powerful person? Belfort with his huge personal wealth or Denham as a federal officer, a representative of the most powerful country on Earth. There was a lot of discussion at the time about if people actually saw Belfort as the hero of this film, that people liked him and wanted him to win. I saw this as Goodfellas but for white-collar crime. In this scene Belfort helps further his own downfall, antagonising the FBI. In the final moments of this scene, Belfort has just finished throwing money at Denham and his arrogance and deluded grandeur fade as he realises he has just made a terrible mistake.

Also Read: Iconic Scenes: American Psycho – Business Card Scene

Richard Norton

Gentleman, podcaster and pop culture nerd, I love talking and writing about pretty much all pop culture.

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10 Things You May Not Know About 'The Wolf of Wall Street'

Belfort’s inspiration to write the book 'The Wolf of Wall Street' came from an unlikely place

Following his arrest for stock-market manipulation, Belfort pled guilty, and in exchange for his cooperation with an ongoing FBI investigation, was sentenced to 22 months in prison. In 2004, Belfort arrived at Taft Correctional Institution, a low-security federal prison in California, where his cubemate was actor, comedian and marijuana rights activist Tommy Chong, who was serving a nine-month stint for selling drug paraphernalia.

The two men bonded, exchanging stories about their outsized pre-prison lives. Chong, who was writing a book of his own, encouraged Belfort to take a stab at capturing his life story. According to Chong, Belfort’s first tried his hand at fiction, unsuccessfully. As he told MacLean ’s , “You’ve got to write those stories you’ve been telling me at night. Your real life is much more exciting than any kind of imaginary story you could come up with.” Belfort was also inspired by Tom Wolfe’s satirical novel of 1980s excess, The Bonfire of the Vanities , which he discovered in the prison library. Belfort and Chong remained friends after their time in prison.

The trip from page to screen was rocky — and 'The Wolf of Wall Street' was almost a very different film

Following his release, a broke Belfort redoubled his efforts, receiving an advance from Random House for more than $1 million for his manuscript. Hollywood quickly came calling, with stars like Brad Pitt and Mark Wahlberg eyeing the part. Among those most interested was DiCaprio, who brought director Scorsese on board, for what would be their fifth collaboration. But after a deal with Warner Brothers fell through, the film was in limbo, and director Ridley Scott was briefly attached.

In 2010, an independent production company, Red Granite Pictures, bought the film rights, and casting got underway. For the role of Donnie Azoff, Belfort’s co-founder, a number of actors were considered, before Jonah Hill convinced DiCaprio and Scorsese that he should audition for the role — the first time he’d had to audition in years. Actresses Blake Lively , Amber Heard and others were reportedly considered for the role of Belfort’s second wife before Australian newcomer Margot Robbie was cast. Alan Arkin reportedly passed on the role of Max Belfort, Jordan’s father, which went to Rob Reiner. And the role of Robbie’s on-screen aunt, eventually played by former Bond Girl and Absolutely Fabulous actress Joanna Lumley, was originally offered to Julie Andrews , who turned it down due to the after-effects of ankle surgery.

One of the most well-known scenes wasn’t in the script

Early on in the film, DiCaprio has lunch with a successful stockbroker named Mark Hanna. While Hanna was a real figure, his unusual behavior during the meeting didn’t happen. Matthew McConaughey ’s rhythmic beating of his chest and humming was actually an acting technique he used before filming to get himself ready for a scene. As he told Graham Norton, “That's something I'll do…to relax myself, get my voice to drop. I've been doing it for a while, but it's just something I do.” DiCaprio noticed it during rehearsals and suggested to Scorsese that they film it, later saying that it helped set the tone for the movie.

The names of the real-life people who inspired the film were changed for the big screen

While Hanna’s real name made it into the film, others didn’t. Belfort’s first wife was named Denise, not Teresa. And his second wife’s name was Nadine, not Naomi (although Belfort did nickname her The Duchess and named his yacht after her). FBI Special Agent Gregory Coleman, who spent more than half a decade investigating Belfort and his company, became Patrick Denham in the film. The real name of Belfort’s friend and Stratton Oakmont co-founder was Danny Porush. Belfort used his name in his book, but after Porush threatened to sue the film’s producers, they changed it to Donnie Azoff.

The real-life “Donnie” disputes some of the film’s depiction of events

Porush admitted that many of the film’s most outlandish events actually occurred, including Belfort sinking his yacht in Italy and nearly crashing his helicopter on his lawn. It’s also true that Porush ate the goldfish of a broker with disappointing results and that the company paid a secretary $10,000 to shave her head. And Porush actually was friends with shoe designer Steve Madden, who, along with Belfort and Porush, wound up going to jail for his role in the securities fraud surrounding the stock offering of his eponymous company.

But he took issue with some of the other moments depicted in both Belfort’s memoir and the film. According to Porush , nobody ever referred to Belfort as the “Wolf” of Wall Street, Belfort instead gave himself the nickname for the book. And Porush denies that employees abused the little people the company hired by throwing them as shown in the film.

Belfort has a cameo in the movie

During the years-long delay in production of the movie, Belfort acted as an advisor for DiCaprio. He estimated that he spent hundreds of hours with the actor, walking him through both the details of his financial schemes and how to portray the physical and mental effects of the drugs Belfort consumed on a regular basis. As DiCaprio told The Wall Street Journal , Belfort was “incredibly open about his life, especially the most embarrassing parts. I interviewed him incessantly and tried to pull out every detail I possibly could. We incorporated a lot of other stories that weren't even in the book into the movie."

Despite his years of work with DiCaprio, Belfort didn’t meet Scorsese until near the end of filming, when Belfort had a small role in the film’s final scene. He’s the man who introduces DiCaprio’s Belfort at a seminar in Australia where Belfort’s a featured motivational speaker.

The characters’ rampant drug use is a key part of the film but showing that descent came at a cost

For the infamous Quaalude scene, where an impaired DiCaprio tries to drive his car, it was the actor who came up with the idea to open the car’s door with his feet. After several attempts at getting the tricky physical shot, DiCaprio injured his neck and had to wear a brace for several days. And all that cocaine? It was crushed vitamin B. The cast snorted so much of it during production that Hill developed bronchitis and wound up being briefly hospitalized .

The film was banned in several countries

Thanks to its depictions of drug use, sex and an almost record-breaking level of profanity, it’s perhaps not surprising that the film rattled overseas censors. In fact, Scorsese had to cut several scenes in the U.S. version to avoid receiving an NC-17 rating. Additional cuts were made before its release in India and Lebanon, while the United Arab Emirates initially cut 45 of the film’s 180 minutes. Singapore officials limited its distribution, and the film was banned entirely in Malaysia and Nepal. Despite this, it was Scorsese’s highest-grossing film to date, netting $392 million worldwide.

Scorsese and DiCaprio received criticism for the film’s portrayal

Critics and audiences were divided in their reactions to the film. Some, including law enforcement officials who had worked on Belfort’s case and those who had been victims of his fraud, were angered by what they considered to be the film’s glorification of both Belfort’s debauched life and the crimes that funded it. Especially since the film opened just a few years after the 2007-2008 financial crisis , caused in large part by unscrupulous Wall Street actions. Others defended the film, saying that it played like a morality tale, with Belfort getting his just deserts and going to jail. DiCaprio defended the film, noting, “I wanted to make an unapologetic film on the subject matter that didn’t give any false sense of empathy for the character, but that instead was an analysis of man gone awry.”

The film has been ensnared in a number of legal cases

Before filming even began, the Department of Justice sought an injunction against Belfort’s publisher and DiCaprio’s production company, only relenting when Belfort agreed to pay 50 percent of his earnings as part of his deal to pay $100 million in restitution to his victims. In 2018, federal prosecutors accused Belfort of reneging on his restitution deal, claiming he still owed more than $90 million — despite pocketing millions as a motivational speaker thanks to the film’s success.

Red Granite, the film’s producers, were implicated in a scheme that saw billions siphoned from a Malaysian development fund — including the money used to finance the film. Producer Riza Aziz was indicted, and the case led to the downfall of the government of his stepfather, Malaysia’s prime minister. In 2020, Belfort filed a lawsuit that accused Red Granite of fraud, alleging that he’d been unaware of the illegal source of the film’s funding, and asking to be released from his contract with the company, which owns the rights to both The Wolf of Wall Street and Belfort’s second book.

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Jordan Belfort: The real Wolf of Wall Street and the men who brought him down

Jordan belfort scammed investors out of $200m. as martin scorsese and leonardo dicaprio bring his outrageous life to the big screen, nick harding gets the real inside story, article bookmarked.

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The pitch could have been barked by any of the "motivational-training" snake-oil salesmen who ply their wares in the corporate sector. But the man behind this particular "sales and persuasion" one-day course in Australia last year thought himself special enough to demand a US$5,000 entrance fee.

The inflated price tag may have been something to do with the quality of the after-dinner anecdotes, as the man hosting the event was Jordan Belfort - a 51-year-old American ex-con who is among the most infamous crooked businessmen in recent history. In the 1990s, Belfort was reputed to have been worth £60m, earning £600,000 a week. He owned a sprawling estate in the Hamptons, a fleet of supercars and a 167ft yacht which once belonged to Coco Chanel and which he sank in the Mediterranean. He had a supermodel wife and a drug and alcohol habit. He employed an army of young salespeople who aggressively sold stocks in questionable companies to unwitting investors. His workers were rewarded with massive bonuses and parties where prostitutes and dwarf-throwing competitions were provided as entertainment.

Today, the disgraced swindler (a term Belfort hates) has reinvented himself as a reputable businessman, with clients such as Delta and Virgin Airlines. Much to his delight, he's also being played by Leonardo DiCaprio in Martin Scorsese's new film, The Wolf of Wall Street, which portrays the lavish, drug-fuelled and illegal antics at Belfort's now-defunct East Coast stocks and shares brokerage Stratton Oakmont.

But, says Belfort, he's not letting all that glitz go to his head - he is a new man since his 2004 conviction for defrauding clients of more than $200m. "We are not the mistakes of our past," he recently said. "We're the resources and capabilities that we glean from our past. It chokes me up a little when I think about it. I was a bad guy. And it wasn't like I started that way. You can get desensitised to your own actions, it's easy on Wall Street... I shouldn't really care what people think of me. I know I'm good. But of course I do care."

Former Assistant US Attorney Joel Cohen, who helped put Belfort behind bars, couldn't agree less. "If he is trying to create the impression that he is basically an honest guy who stepped over the line a bit, that is dead wrong. This is a guy who woke up every day, seven days a week for many years, and said, What crimes can I commit today? He was looking to rip people off on a daily basis."

The yacht, the cars, the supermodel wife and the fortune have all gone. The father of three now lives in a modest three-bedroom house in a relatively inexpensive LA suburb. At his seminars, attendees are taught a technique he calls "Straight Line" selling; a set of pre-determined steps from first contact to closing a deal. It is, he has said, roughly the same system he taught his employees to use when pressuring people to buy shares in the useless firms he once promoted. He's paid around $30,000 an hour for his wisdom.

He makes a very good living, then - but his income is a fraction of the vast wealth he enjoyed, and a court order requires him to pay 50 per cent of his earnings into a compensation fund for his thousands of victims. Nevertheless, the sale of the film rights to Belfort's two memoirs, The Wolf of Wall Street and Catching the Wolf of Wall Street, are estimated to have earnt him $2m. The film is up for a Golden Globe (Best Comedy) tonight and there is talk of several Oscar nominations when they are announced on Thursday.

Over the festive period, American film-goers flocked to see DiCaprio as Belfort marching hookers on to the office floor, receiving the attentions of a young lady at the wheel of his Ferrari and tearing up a sofa to find a stash of cocaine. Predictably, there has been outrage that the film glorifies these exploits. All of which, one imagines, gave Belfort his best Christmas in years - as he wrote on his blog at the end of last month: "Visit the theater and watch DiCaprio portray me as I was and remember the man I have become."

And what has Belfort, whose representatives did not answer our request for comments, become in the seven years since his release?

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By all accounts a natural raconteur, Belfort delights in recounting stories of drug-fuelled excess, and distances himself from other disgraced businessmen. He describes Bernie Madoff, the US financier convicted in 2009 of defrauding investors of $65bn, as a "complete crook who took people’s money", and defends his own actions by claiming 95 per cent of his business dealings "were totally legit".

The Wolf of Wall Street: Most outrageous quotes

Belfort also gives the impression that he was seduced by the financial environment of the time. The market of the early 1990s made a lot of people a lot of money and, by Belfort's reckoning, his endeavours cost no one more than they could afford. "I don’t like to come off like what I did was not wrong. But I wasn't dealing with poor people. I was dealing with very rich people. No one lost their life savings," he argues.

This revisionism, however, is not the account Belfort gave to court when he pleaded guilty to charges of international securities fraud and money-laundering in 1999. Facing 20 to 30 years in jail, he agreed to gather evidence against his friends and colleagues in a year-long undercover operation in exchange for a lighter sentence.

It is also not an account that the two key investigators behind his downfall recognise.

FBI Special Agent Greg Coleman began investigating Belfort in 1992. "I have run into individuals who were bad people doing bad things and I've run into ones who were basically good people who made a mistake and will never do it again," says Coleman. "Belfort was really bad. And while there is some attempt on his part to clean up and change, I think he is still a work in progress. There were a lot of victims who could ill afford to lose that kind of money."

Joel Cohen concurs. "My sense is that he is only half-repentant, for whatever reason - whether he thinks it sells books and movies better. He says he is sorry to his victims but on the same token he tells the world that only 5 per cent of his behaviour was criminal."

Both have mixed feelings about the movie. Says Cohen, "It's not going to be about his prosecution. It will be about his rise and dwarves being thrown out of cannons. I fear it is being marketed as a general comment of all that ails society, when in fact it is a sordid story about bad people who do not represent society at all."

While the debauchery depicted in the film is true, plenty of the Belfort story is myth. His supposed links to the mafia have never been proven and Stratton Oakmont - a name chosen as it k sounded British and reputable - was never a Wall Street firm: the Wolf of Wall Street operated from a shopping mall in suburban Long Island.

Stratton Oakmont was a so-called "boiler room"; ostensibly a call centre where young workers rang investors and random names from the telephone directory, pushing them to buy shares in companies it financed and floated on the stock exchange (in a process called Initial Public Offerings or IPOs). Stratton Oakmont practised a technique called "pump and dump": investors were first hooked with the promise of shares in stable companies and then persuaded to invest in Stratton’s IPOs. The greater the number of people who invested, the higher the share prices rose. Illegally, Belfort and a group of insiders he tipped off also bought shares in these businesses. When the prices peaked, Belfort tipped off his cohorts to sell. They all made fortunes while the share prices plummeted, leaving everyone else with worthless stocks.

Belfort says he "exited the womb an entrepreneur". At 16, he sold ice lollies, bagels and trinkets on the beach at Long Island and with the money he made he put himself through college. He enrolled in dental school, but walked out on the first day when the Dean told the new intake that they were in the wrong profession if they wanted to make money. Instead, he began selling meat off the back of lorries. He started his own firm, but it went bankrupt, owing $24,000, when he was 24. Desperate for a job, Belfort started at the bottom in a Wall Street trading firm working as a connector, making calls to potential investors whom he would patch through to the brokers. "I was pond scum."

When he finally passed his traders' exams, he began his stockbroking career on 19 October 1987: Black Wednesday, when the market plummeted 508 points in a day. The company he worked for closed, but the setback only fuelled his desire. In 1989, he set up Stratton Oakmont.

When Cohen and Coleman started investigating the firm in 1992, the brokerage was already the subject of a civil fraud lawsuit brought by the US Securities and Exchange Commission (SEC). As a result, the company was ordered to pay a $2.5m fine and Belfort and his partners, Daniel Porush (played by Jonah Hill in the film) and Kenneth Greene agreed to $100,000 fines apiece. None of the three admitted or denied the SEC's allegations and the penalty was peanuts compared to what the firm and its employees and bosses were earning.

Coleman and Cohen spent the following years gradually digging away to collect evidence - but the loyalty Belfort engendered in his well-paid staff made it an almost impossible task.

The breakthrough came when Belfort became desperate and began smuggling money out of the country. The funds ended up in Swiss bank accounts, where it was laundered - and money-laundering was Coleman's area of expertise.

"The crowbar we used to open them up was the tax evasion," he explains. "We were able to get some witnesses who were helping them smuggle the money to provide information about that. We used that to go to the Swiss authorities to get them to provide information about the bankers Belfort was using in Geneva. It took time because bank secrecy in Switzerland was still very robust and we had to convince the authorities that this sort of behaviour was something they should provide information to us about. Eventually we got Belfort’s Swiss banker to co-operate."

With concrete evidence, both Belfort and Porush were arrested in September 1998 and persuaded to work with the investigation. Belfort was required to post $10m security as a condition of his bail. (The security took the form of jewels which he had delivered to the courthouse in an armoured car accompanied by armed guards.) The skills that made Belfort such a good conman also made him an effective government mole: the evidence he collected was used in scores of other prosecutions.

Belfort eventually pleaded guilty. The case took years to come to trial and in 2004 he was convicted, sentenced to four years, and jailed, serving 22 months in all. He reported to a federal prison camp in California, where he shared a cell with the comedian Tommy Chong, of Cheech and Chong fame, who was serving a nine-month sentence for selling drug paraphernalia.

Chong was working on a book; after hearing Belfort's outlandish tales, he persuaded his cell-mate to put pen to paper as well. On his release in 2006, Belfort realised there was an appetite for his life story and started pitching his manuscript. Publisher Random House gave him a $1m advance. Within a year of his release, The Wolf of Wall Street was on sale.

Coleman still keeps in contact with his former prey "as a subtle reminder that I am still watching", and the FBI man admits he is curious about the film. Asked to consult on the plot, he's played by actor Kyle Chandler (who recently appeared in Argo and Zero Dark Thirty). "I want to see how I am portrayed," he says. "I hope it's done realistically, rather than the stereotypical FBI guy in a suit." As for Cohen, "I don’t think Jordan loves me. In his book, his caricature of me is unfair. He describes me as 'the bastard' about 100 times."

Belfort has realised that infamy can be lucrative. However, for the man who once boasted he made $13m in one day, crime will not necessarily pay in the end. According to a recent letter from prosecutors sent to the judge overseeing his compensation agreement, so far Belfort has paid $11.6m of the required $110.4m into the fund. The letter suggests he has been withholding payments and that he is in default of his agreement. Belfort disputes this and is currently in talks with the federal courts to resolve the situation. Whatever the outcome, the Wolf still has a long way to go before he pays his debt to society. 1

'The Wolf of Wall Street' (18) is out on Friday

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What ‘The Wolf of Wall Street,’ ‘Dumb Money’ and ‘The Big Short’ say about investor behavior

Wall street-themed movies can remind investors to control risk, temper impulses and diversify their portfolio..

Every few years, Hollywood turns money into a movie star. Films with financial themes take center stage and dramatize stock market swings, Wall Street scandals and colorful (albeit greedy) characters.

Many of these movies, such as “The Wolf of Wall Street,” “Dumb Money” and “The Big Short,” purport to show how real events unfolded in financial markets. They try to entertain as well as educate viewers.

But how realistic are they?

“It can be fun to see how Wall Street manages to blow itself up every so often,” said Russ Hackmann, a Boston-based financial adviser. He says these films can serve an instructive purpose by reminding investors to control risk, temper their impulses and diversify their portfolio.

Yet movies also need to tell a compelling story to captivate audiences. This limits their educational impact. “Almost all movies are not a good place to steer people for financial advice,” Hackmann said. “I’ve never seen a movie that shows people quietly saving for the long term. That would be pretty boring to watch.”

Perhaps the least boring financial movie is “The Wolf of Wall Street” 2013), which Hackmann calls a cautionary tale about investment scams. He credits the script for making useful points about picking stocks in a fruitless attempt to beat the market.

In one scene, Matthew McConaughey (playing Mark Hanna, a real-life stockbroker) tells Leonardo DiCaprio (playing Jordan Belfort, another stockbroker), “Nobody knows if a stock is gonna go up, down, sideways or in circles, least of all stockbrokers.”

This reinforces well-established market wisdom that most portfolio managers do not consistently outperform the S&P 500 Index especially given their funds’ fees that reduce returns over time.

Movies can also reflect societal changes in investor behavior and psychology. In “Dumb Money” (2023), we see how a struggling financial analyst can ignite a national frenzy by harnessing social media to share his views on the market.

“It’s probably more sensationalized compared to real life,” said Omar Qureshi, an adviser in St. Louis, Mo. “But it’s relevant to the psyche of the markets today — the popularization of investing through online platforms where so-called dumb money can band together as a community” to buy a stock such as GameStop and foil hedge fund managers betting on its shares to fall.

While the movie captures the thrill of individual investors — including many first-timers — reaping heady gains, it also shows how volatility wreaks havoc on their emotional wellbeing.

“What it doesn’t show is the tried-and-true [investing] strategy,” Qureshi said. “Maybe 1% of the time, concentrating your bets can lead to wealth. But that’s literally gambling,” whereas diversification and prudent asset allocation powers a more effective and resilient financial plan.

Qureshi also hails “Dumb Money” for alerting audiences to the risk of overleverage. Taking on debt to join the crowd’s surge into a meme stock carries extreme risk. “It’s a good lesson,” he said. “Leverage is a truly double-edged sword.”

Another lesson that movies — and some financially-themed television shows — highlight is how runaway ego can drive faulty investment decisions. If you lack humility and insist that you’re smarter than everyone else, you’re apt to make colossal mistakes.

Even more than “Dumb Money,” “The Big Short” (2015) adopts a quasi-documentary format. The script is packed with facts, figures and explanatory information. In a now-famous one-minute monologue in a bubble bath, actress Margot Robbie translates Wall Street jargon into plain English and explains how some traders navigated the subprime mortgage crisis.

“In ‘The Big Short,’ you see a lot of hubris among traders,” said Mike Mussio, a certified financial planner in Bethesda, Md. “It all leads to some type of turmoil. The components of the soup that smell so good on the stove are in the end the things that cause a meltdown.”

More: ‘Dune: Part Two’ Hits Theaters. Can It Revive Hollywood’s Momentum?

Also read: Taylor Swift, ‘3 Body Problem,’ ‘Shōgun’ highlight a blockbuster March for streaming

Wolf Street

Brick-and-mortar meltdown fells another retailer: joann inc. files for bankruptcy 3 years after ipo, by wolf richter •  mar 18, 2024  •  92 comments, the ipo allowed the pe firm that had acquired joann via an lbo in 2010 to dump the shares into the lap of the public in march 2021., by  wolf richter  for  wolf street ..

It all came together in one fabulous package, in the bankruptcy filing today by Joann Inc., an old-line fabric and crafts retailer with about 850 stores in the US.

It’s the stuff we’ve called Brick-and-Mortar Meltdown since 2017, during which hundreds of major retailers, from the biggest ones on down, filed for bankruptcy and most were liquidated. Plus, cherry on top of the cake, it’s the stuff we’ve seen since 2021 in our pantheon of Imploded Stocks .

Joann Inc. brings it all together:

• A PE firm (Leonard Green & Partners) that had acquired an established retailer in a $1.6 billion leveraged buyout (LBO) 13 years ago and left the retailer suffocating under the pile of debt that had funded its own buyout;
• The switch by Americans to ecommerce that then pressured revenues at its brick-and-mortar stores;
• An exit for the PE firm via an IPO at peak hype-and-hoopla in March 2021 that dumped those shares into the lap of the gullible public;
• Followed inevitably by the collapse of the shares that wiped out these shareholders;
• And today, three years after the IPO, the bankruptcy filing that begins the process of transferring ownership of the company from the current shareholders to others, with shareholders getting nothing.

Joann Inc. announced today, after weeks of rumors, that it filed for a “prepackaged” Chapter 11 bankruptcy, and that all outstanding shares will be canceled and that holders of the common stock will lose everything – they’ve already lost nearly everything – and that certain creditors, PE firms, and board members will get the restructured company.

People are still trading these worthless shares today at around 18 cents. Down the road, the end users of those shares, when they get tired of looking at that unsellable line item in their brokerage account, will have to ask their broker to remove those cancelled shares.

The company said today in an SEC filing that it had entered into a Transaction Support Agreement on March 15 with the holders of its senior secured term loan facility; and with the PE firms Green Equity Investors CF, L.P., Green Equity Investors Side CF, L.P., and LGP Associates CF, LLC; and with “certain current or former members of the Company’ board of directors”; and with “certain third-party financing parties that executed joinders thereto.”

It said its Chapter 11 bankruptcy filing today would provide “for a court-administered reorganization pursuant to a prepackaged joint plan of reorganization.”

The trigger for the bankruptcy filing was the company’s default on two loans totaling $1.06 billion, plus unpaid interest.

The transactions of the reorganization plan would result in:

• All issued and outstanding shares “being canceled and extinguished without consideration.”
• The company becoming a private company that will no longer report to the SEC.
• Its long-term debt being reduced by $505 million.

It said its stores would remain open during the reorganization, and that employees, vendors, landlords, and other trade creditors would get paid in full “in the ordinary course of business.”

Retention bonuses for executives . Three executives would be paid retention bonuses in about September 2024, which the board agreed to on March 15:

• $535,740 to Christopher DiTullio (Executive VP, Chief Customer Officer, member of the Interim Office of the CEO)
• $371,250 to Robert Will (Executive VP, Chief Merchandising Officer)
• $135,740 to Scott Sekella (Executive VP, CFO, and member of the Interim Office of the CEO.

The DIP loan . To fund the company during the bankruptcy proceedings, it has obtained a debtor-in-possession (DIP) loan of up to $142 million. The DIP facility will be secured by a super-priority lien on substantially all of the company’s assets.

All holders of its senior secured term loan “have been (or will be) offered the opportunity to participate and fund their pro rata share of the DIP Facility.” The DIP loans will accrue interest at SOFR (currently 5.3%) plus 9.5% per annum. So roughly 14.8%.

The DIP facility consists of $107 million in “new money term loans”; $25 million of outstanding trade payables exchanged into term loans; and up to $10 million via an uncommitted “accordion facility,” allowing the company to add term loans.

The brick-and-mortar meltdown . It has been tough for years being a brick-and-mortar retailer. Joann sells the type of merchandise – yarns, fabrics, crafts, art supplies, sewing machines, etc. – that anyone can find on the internet anywhere, not only on Joann’s own site, but at countless vendors, including cheap stuff directly from Asia listed on third-party platforms such as Amazon and now Temu. Online, the selection is endless, prices are easy to compare, and it arrives directly at the buyer’s home.

Ecommerce is a structural change in how Americans are shopping for this kind of stuff. Americans are still buying gasoline, food, and new vehicles at brick-and-mortar stores, which is over half of total retail sales, but the other stuff has been wandering off to ecommerce.

Walmart figured it out years ago and became the second largest ecommerce seller in the US, after Amazon, and the largest grocery seller . But most of the rest of its stuff at its brick-and-mortar stores is in slow-motion decline.

Ecommerce will continue to wipe out brick-and-mortar retail chains and retail properties, and thereby will continue to wreak havoc in commercial real estate as it has done for years.

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  92 comments for “ Brick-and-Mortar Meltdown Fells another Retailer: Joann Inc. Files for Bankruptcy 3 Years after IPO ”

The debt that was piled up in the process of buying out the company was a accounting trick that came back to haunt them.

Investors who are like Carl Icahn, and are “market activists,” provide a service to society in shaking up moribund corporations. But the vultures of private equity, focused on fleecing corporations of their assets and saddling them with debt, are exploiting lax laws and a permissive climate.

In the end, it might be good to bring back shame as a motivating (or de-motivating, as the case may be) factor stopping investors from looting helpless, defenseless companies.

PE firms have these plans in place all the time high debt hope things get to point for ipo why not during the free money era maybe one of their last free money eras i sure hope so. Having worked for a PE portfolio company I too have a bad taste for the group as a whole . But I don’t know that they do anything illegal. Just unscrupulous .

“The debt that was piled up in the process of buying out the company was a accounting trick that came back to haunt them.”

I think the increase of leveraged buyouts in recent years was a side effect of ultra-low interest rates. The cost of borrowing was very low, allowing large sums to be raised at minimum cost.

I suspect the deal itself results in large profits for the LBO organizers. If the company does well, it’s icing on the cake. If not, it served its purpose.

I totally agree with your comment. No way people and companies would have levered up without ridiculously low interest rates. And of course all this leverage just pushed prices up into the stratosphere, rewarding the first ones in line and penalizing those who came after.

“I suspect the deal itself results in large profits for the LBO organizers. If the company does well, it’s icing on the cake. If not, it served its purpose.”

Yes, either way it’s a win/win for them.

This wasn’t about low interest rates and free money. LBOs were happening years before the recent super-low rates. Easy money doesn’t help; neither did the “carry trade” on low loan rates in Japan, for example, low enough that it was easy to arbitrage, if you’re well-connected. Unfortunately pensions, and the various retirement funds have little concern about a company being taken-out, loaded with debt, then, a few years later, launched as a new IPO. In the case of Joann’s, it seems like the residual value of the company is going to end up in the hands of the same PE firm that set this whole thing in motion.

I looked for a chart of LBO activity and found one: http://www.axios.com/2023/01/03/lbos-just-had-a-huge-year

Looks like an increasing trend and a spike in 2021.

I would guess if debt is cheaper, and debt is used for some desirable purpose, then it’s reasonable more debt would be used for that purpose.

Don’t forget the insider management (having the best financial info) who sold out the company (incumbent management usually gets an equity stake in LBOs) and the “free” ZIRP money (printed by the G, expropriating savers) that provided the indispensable rocket fuel for LBOs.

There are plenty of villains to go around.

Shame is for “losers”. Ask anyone worth over, (or kiting) say $5-10M.

Check the price of gold in Argentine pesos, LOL

Empathy, fairness, is for losers here? 45 proved all are, in spades….why I threw in kiting.

I honestly didn’t quite get that response at all, but as you know Econ isn’t my strong suit. I do know we are the worlds most powerful, dominant, and the biggest pigs……I’d hate to be in my equivalent wealth class in Argentina, GINI index much worse there. Born very lucky, both of us, compared to Argentina.

Private equity firms are cancer.

Yup I like it better when they honestly called themselves LBO firms the whole rebranding to Private Equity was a farce to make them sound like they are doing the market a favor.

You are looking at fast money (LBO, as JER says) hustlers compared to REAL Private Equity;

Cargill, Nestle, etc. The owners of the world…..

Also saw SPACS described as poor man’s LBO/Corp Raider “ETF” (?).

Still remember Soros comment at standard dog and pony “search for the guilty farce” after GFC.

“They will keep inventing this stuff faster than you can make laws to regulate it”….or something to that effect.

Yep, they pay themselves handsomly as they divest all the equity in the business. Ever watch “Shark Tank”, they offshore any production and ramp up the marketing, and if it sours they bail. Interesting to know how many ventures they have taken the money and run..

Very true. And guess who is likely giving them the DIP financing to keep operating after pledging all their assets that have any value… another private equity group.

This is what they do – take sick companies private or buy them out if they’re already private, load them up with massive debt to make huge payouts to themselves and their investors. Huge as in 5x, 7x 10x their investments. Then they turn around and sell these zombie companies thru IPO’s to idiot retail investors.

The companies naturally go broke in a few years, retail investors lose their shirts, and a new private equity group comes in and does it all over again.

Welcome to Wall Street and Private Equity. This game pays for their expensive new houses down here in Florida, along with the yachts parked behind them and the jets they fly down in.

I just don’t understand why retail investors and pension fund managers keep buying this crap?

Friends with the PE guys or just plain dumb? Am I missing something?

All of them have a fiduciary duty to the shareholders. The real problem is that nobody goes to prison for fraud anymore.

But the question is why don’t retail buyers of the crippled IPOs wise up after a few rounds/decades of crapola LBOs?

In other words…who buys this sh*t and why?

Best guess, like with other gross malinvestments of the last 20 years, automatic investment programs – while providing useful baked-in diversification – have also baked-in witless uptake of any piece of crapola that somehow manages to be hauled across the finish line of an IPO.

Indexing is very useful, but I suspect that it is deep in its witlessness stage.

Besides PE, don’t forget the foolhardy but fashionable high-risk bets being placed in the arena of private debt.

Take a look, for example, at non-marketable holdings (both equity and debt) in portfolios at the nations largest university endowments.

A possible parallel from a century ago: “A severe depression like that of 1920-21 is outside the range of probability. We are not factoring protracted liquidation.” — John Kenneth Galbraith, The Great Crash, [quoting a Harvard Economic Society official in reference to Harvard’s portfolio investments up until the post-1929 liquidations at huge losses.]

Private equity doesn’t even make any money for its investors. You are better off investing in small cap value for the same historical returns. PE does make its owners very rich, however.

The entire cabal running the US, from the corporations to the politicians and bureaucrats, is a giant cancer upon society. The US is finished as we ever knew it.

No worse than it was a hundred years ago. The collapse of the stock market was the result of massive financial chicanery and the government looking the other way.

The economic cancer is not just from private equity firms, albeit a takeover by avaricious persons putting profit ahead of everything is at the root of many companies’ problems, e.g., Boeing, which ruined its previously excellent reputation. As in China, customers in the USA are more and more likely to have less and less disposable income and must spend more on necessities as food, health insurance, and other consumer level prices go up, like rent.

Like the CCP, the tax evading US rich (who are desperately investing to try to replace their unhappy work force with embodied AI) wonder why ordinary Americans are less and less likely to buy expensive items or go shopping for things that are not necessities. See Oxfam: “According to a 2021 White House study, the wealthiest 400 billionaire families in the U.S. paid an average federal individual tax rate of just 8.2 percent. For comparison, the average American taxpayer in the same year paid 13 percent.” (That is the open, known billionaires as opposed to secret more than billionare families whose wealth is secret and hidden in foreign trusts, foreign, anonymous companies, etc.)

You can avoid most of these investment blow ups if you stick to companies paying long term dividends. But make sure the dividend is covered by earnings. Some play games like borrowing money to pay the dividend. Wall Street puts games like that in their heads.

Paying dividends is like Paying someone to be your friend. It artificially raises the stock price and encourages stock buy backs. Putting the money back into the company for real growth and development is probably better at keeping the boat floating wouldn’t you think?

Also love how the Clown committee gets paid and the so called “owners” get nothing.

In many cases there is a limit to how much you can usefully “put back into the company”, isn’t there? Take an old school company like Coca Cola for example. Not a lot of R&D going on there.

Why would you want to invest in a company if it doesn’t pay dividends?

No. People have studied this stuff endlessly. Dividends make no difference to no long term return that can’t be explained by other factors.

JoAnn today, Reddit tomorrow. I suspect corrupt pension managers bought the biggest bulk of the garbage. Investors with minimal due diligence won’t touch the stock with 10 feet pole.

Yet another business was killed by a private equity firm, just like Sears and Toys R Us. There should be regulations preventing this.

After Sears went into PE, I went into one of their supposedly revitalized stores. It was the worst retail location of any kind I have ever seen. It was obviously not survivable, bereft of staff (competent or not), and only had overpriced items not appropriate for our region. I walked out and never went back. Somebody was just mining that trademark into the ground. That said, assuming PE is very greedy, I do not have excessive sympathy for the greedy retail investor bag-holders. In a free country we can’t protect people from themselves. A fool and his money are soon parted, no matter what we do.

I don’t think Sears ever went the PE route. IIRC, they spun off some of their real estate into a REIT around 2010 (Seritage) and then Eddie Lampert did a good job of killing the company himself without needing to go to Private Equity.

Sears stock was trading right up until a bankruptcy judge cancelled it.

However, there is a remnant of the old Sears called TransformCo. There are maybe 3 Sears stores left in the US, I think. They still have an e-commerce site branded as Sears.

Eddie Lampert and his ilk ARE the very apotheosis of private equity.

Sears was looted.

He was Kramer’s buddy and on his CEO “Hall of Fame” back when I was trying to learn Econ from CNBC….I got to see the S&P REAL bottom…LIVE!……666 and some change……thought there would be some Christian talk about that, but nothing. Guess all the big preachers were losing millions, too…..not feeling the Lord’s presence as much.

Learn more here.

Some tidbits on Joann 2021 IPO – ENJOY: Forbes: Stitch Pitch: Fabric And Crafts Retailer JOANN Files For IPO Feb 16, 2021 — The home crafting market is large—over $40 billion—and growing. JOANN is the category leader in sewing, with approximately one-third market … Surprise, went below the expected price in 2021: Joann, Inc. (JOAN) raised $131.28 million in its initial public offering (IPO) on March 11, 2021, when it priced 10.94 million shares at $12 each. This was below the range of $15–$17, and the number of shares was the same as in the prospectus Sounds like Trump valuation of his wealth: JOANN Inc. (JOAN) Statistics & Valuation Metrics – Stock Analysis The enterprise value is $2.00 billion. Again Forbes: Retail: Joann files for IPO as COVID pandemic lifts sales Fortune — WHOSE FORTUNE! fortune.com › joann-fabric-ipo-covid-sales-surge Feb 16, 2021 — 31, Joann (previously known as Jo-Ann Stores) reported that its sales rose 24.3% to $1.921 billion, while the retailer returned to profit with … sOMEONE CAN SAY, I told you: Joann IPO: Will Investors Be Stuck Holding The Bag? investing.com › analysis › joann-ipo-will-i… Feb 23, 2021 — The company is heavily indebted, with over $921 million in long-term debt as of October 31, 2020. There is the threat of competition from …

I wonder if the PE firm issued some debt to pay themselves dividends before the IPO? Another good trick

“Joann sells the type of merchandise – yarns, fabrics, crafts, art supplies, sewing machines, etc. – that anyone can find on the internet anywhere, not only on Joann’s own site, but at countless vendors, including cheap stuff directly from Asia listed on third-party platforms such as Amazon and now Temu. Online, the selection is endless, prices are easy to compare, and it arrives directly at the buyer’s home.”

This is a BS narrative. JoAnn is just poorly run and overleveraged. I don’t see Hobby Lobby struggling.

“I don’t see Hobby Lobby struggling.”

Hobby Lobby is a private company and doesn’t disclose results. So you don’t “see” the results, and you don’t “see” what it’s struggling with.

Also it may not have a lot of long-term debt (it doesn’t have any publicly traded debt), and so it can afford to do pretty much whatever it wants. A company without debt can shut down, but doesn’t file for bankruptcy. All retailer bankruptcy filings entail debt that the cashflow from operations can no longer support. But if a big company doesn’t have debt, it has very long runway.

There are two parts to the Brick-and-Mortar Meltdown, as you can see in this article: debt and ecommerce.

Invariably, I have had people make these kinds of comments since 2017 about specific retailers, such as Bed Bath & Beyond, Toys R Us, etc., to show that the Brick-and-Mortar Meltdown is a “BS narrative,” and a few years later, the retailers collapsed, LOL. It never fails.

I can buy the same stuff in store for 20% less in Amazon and 90% less in Ali express. For some reason, I don’t need fancy case most of the type.

Not just physical stores are disappearing. Amazon will die if US government doesn’t quickly shutdown temu and alibaba.

So making Jeff Bezos even richer is the patriotic thing to do? To hell with him.

Agree. I don’t buy stocks and I shop local…..just not very damn much of anything.

Hobby Lobby may be private, but Michaels was public up until 2021. They reported a 10% operating margin in 2020. Joanns reported -23.85% the same year.

My wife is a crafter and I am frequently dragged to these stores. The difference between Joanns and Michaels is night and day.

I agree with the general sentiment of the brick & mortar meltdown…

…but I have to say I too notice a big difference between Michaels & Joanns in terms of merchandising quality (as someone with a crafter wife who also gets dragged to these stores).

“Ecommerce is a structural change in how Americans are shopping for this kind of stuff. ”

You may want to add the move to home based services to the mix of a change in buyers habits. Ms Swamps hairdresser is working right through Ramadon at her home salon. The mall hair salon where she also works will be losing customers to the home based salons and will go out of business along with the mall where the salon is located. Why pay $300 for a treatment at the mall salon that can be done at her home salon for $85. The brick and mortar meltdown will be receiving a fatal blow.

In Washington DC you see people getting haircuts right in full view on their front porches.

I went to a home salon 30 years ago in my neighborhood. Her dog tried to hump my leg for half the session, and I had trouble shaking the little guy off. All she did was laugh. True Story. I’d still go to a home salon, but not one with a little dog present and I’m wearing soft corduroy pants.

There are quite a few home-based hair & nail salons in my neighborhood… there’s even a home-based karate studio down the street!

Wasn’t there also a theatre chain scam that was similar to this around the same time? I remember shaking my head thinking “don’t do it people. Don’t buy these shares” Apparently people did.

The AMC theatre chain isn’t a scam. It’s a mental illness where thousands of gamblers convinced each other of a cataclysmic financial event that will make all owners of AMC stock (or gamestop, or bed bath beyond) infinitely rich in a new world order.

What happens when you only get your information from ZeroHedge and Reddit.

Urgh….once again this is feature of our system, not a bug…disgusting to say the least

Retention bonuses for executives. Three executives would be paid retention bonuses in about September 2024, which the board agreed to on March 15:

$535,740 to Christopher DiTullio (Executive VP, Chief Customer Officer, member of the Interim Office of the CEO) $371,250 to Robert Will (Executive VP, Chief Merchandising Officer) $135,740 to Scott Sekella (Executive VP, CFO, and member of the Interim Office of the CEO.

Let’s hope and pray Hobby Lobby makes a similar transition

@Redundant: Was the use of the word “pray” an intended pun? If yes, a very good one!

Amazing that kick starting ISIS for fake Bible relics just kind of faded into people’s memories.

So they relabel their business plan to feature AI and the stock takes off.

Nice to see your name and comments once again, AB.

To your point: as long as there’s froth in investible stuff (AI stocks, dot coms, beany babies, crypto currency, NFTs, Shirley Temple glassware, Dali lithographs), things will get hyperbolic valuations while the music is playing.

Why are we surprised?

If PE firms can sell an IPO story to galactic funds (Vanguard – over $8T, Fidelity – over $11T, Blackrock, B of A, State Street…) that have 8000+ stock holdings, why the surprise?

My wife sews so I have accompanied her to JoAnns a few times. The biggest thing it had going for it was that the actual fabric for sewing is not super practical to buy online ( the other stuff in the store is). You go in to the store and look over the bolts of cloth, looking and feeling them to decide on the one you want. Verbal descriptions or even photos do not do much justice to fabric in real life. Then you take it to the counter and have them cut off the amount that you need. I think they several big problems. The crafty goods they sold with the best margins are being purchased online. People who seriously sew are in decline and the young ones that are picking up the craft are often located in arty urban areas and they go to cuts neighborhood stores with names like ” BOLT” to buy all natural fiber fabrics while JoAnn was mired in a kind 0f 1970’s sears catalog inventory. A big ( and profitable) part of their business used to be patterns. You browsed these in a huge set of books, then once you found the one you liked you got the big fat envelope from the row of huge cabinets with the pattern in it. The last time I was there ( 2 years ago) the pattern shopping process was still the same as when my mother dragged my along in the 1960’s. No switch to digital with videos of fashion shows, point and click on the look you wanted, and then customization to a client to then be printed out on a big printer. A huge opportunity missed I am sure.

“People who seriously sew are in decline”

Bingo, plus I’ve heard from sewing friends that it is much more expensive now to make your own clothes than to buy off the rack.

That depends, I suspect, on whether one wants a bespoke garment constructed from high quality fabric, or fast fashion sent over from Asia and ready to enter the waste stream after a few laundry cycles.

My wife sews/quilts and crochets.

Sewing/quilting takes up way too much space in the home. The only other sewer I know is her grandmother.

My wife, her friends, and our nieces are all in our 20s-30s. Almost none have a room they can dedicate to sewing. Instead, every single one of them crochets. You can crochet in your lap.

Joann’s sells yarn, but so does Michael’s. And Michael’s has a 1/4 of the fabric Joanns has and not nearly as much overhead.

Hubberts Curve,

My wife, too, is really into sewing. And she liked going to JoAnn to touch the fabrics in person. She rarely bought anything else. Some sewing needles or scissors that were on sale.

She used to get patterns there but she gets them, mostly, online.

Occasionally she’ll use the pattern software she installed on the PC but having helped her tape those together is a very large pain.

Excellent comment!

I agree. Not only do the customers want to feel the fabric they also often need more to finish the job on the weekend, not delivered next week or even 2 day prime. One more consideration is the average age of the shopper, maybe 50 yrs old and not comfortable with the internet. There may be some life left in this chain. That said they will suffer the continued decline in the bricks and mortar model on all the other items easily found online. At some point the online price will be close to the same found on stores shelves. I see this happening now with may products. I wonder if online retailers will somehow figure out how to do a brake job or alignment via the internet?

Internet: The Weapon of Mass Disruption.

I agree. My mom used to sew and going to the fabric store was a ritual because you really cannot buy fabrics the way you can patterns online.

That said, this doesn’t really bother me too much. Some stores (and even industries) need to be run as private companies by committed activists rather than public ones my MBAs. I noticed that the three executives getting retention bonuses are all GUYS. Is that really what a company called “Joann’s Fabrics” needs in charge?

As a crafter, JoAnns had a great deal of fabric that was utilized for home decor to simple crafts. Really great prices with deals. It is near impossible to gather the feel of fabric (yarn, thread, cloth) from online. Serious sewers dropping large amounts of cash on fabric want to feel it first and verify the quality. I choose my textiles from quality brands I trust. If a new brand is introduced, I want to see where it is made and make sure the dye is the same. Seems like an opportunity for a niche Mom and Pop shop, because Walmart and Hobby Lobby carry very little in their stores and most of it is cheap bargains. With that said, most of my sewing friends went down to one project a year versus a week. Many of us entered back into the workforce due to inflation and don’t have time to make clothes and home fabrics. The down side, I know what I am buying (clothing and home goods) are less quality and cost more than my own brand. I just don’t have the time anymore. Are we sure we are not in a depression? This feels really depressing to my crafters heart! RIP DIY Stores!

Many are in a depression. Ask any of the unprecedented homeless you see. Inflation is just a word for wealth transfer. Wealth transfer is depressing for most. But we can live with the word inflation, so say the rich. Inflation will lead to only a few mega Corporations left, like Amazon..but as long as we say inflation and not wealth transfer, the rich shouldn’t face pitchforks. On the other hand, never say never..

We need a new metaphor for pitchforks. It’s colorful, but no one owns one.

Well said. The real-estate industry is next , Only Zillow and Redfin

There are several Mom and Pop fabric and sewing stores in my midwestern metro area. My wife and her grandma bought their machines there because they have significantly more product knowledge than Joanns.

Joanns needed an influencer.

Got to disagree – in my experience technical specificatons provide a close-to-perfect description of fabrics for those who have some previous experience. Measurements like Martindale index, fabric weight, material composition and various certificates already give you a pretty good idea of what to expect. Sure, when it comes to natural fibres the fineness and grain is more difficult to capture with a number – hence still all the rage about Egyptian cotton or Merino wool. Yet with a little research on internet forums it’s very difficult to purchase low-quality goods, especially since the younger generations are so addicted to being YouTube product reviewers.

IPO Banksters…

I hate the damn PE companies that are ruining our last places to shop. I know that I “can” buy Joann’s goods online but there is nothing like buying fabric in person. I need to get a feel for the “hand” of it. There is no way an online merchant’s description can tell me all the attributes I can assess in person. In addition, when you order online, you can’t return cut fabric so if it’s not what you were hoping for, tough luck. Joann is/was not a great fabric shop but it was the last one standing here (Hobby Lobby and Walmart are poor substitutes).

A relative bought fabric online and it brought bedbugs. I know, small sample size makes bad inference. Anyhow, cheers!

As Wolf points out repeatedly, these brick and mortar chains are due for either loss of market share or outright bankruptcy due to competition with e-commerce. Everyone in the comments today understandably feel rubbed the wrong way by PE companies. But they just sped up the bankruptcy for Joann’s; it was going to happen eventually.

Creative destructive forces of capitalism prevail. And I’ll echo another commenter regarding the IPO: “A fool and his money are easily parted.” Don’t hate the player, hate the game. If you hate the game, learn the rules or stop playing.

Very sad to see this happen again. So many others have disappeared through almost the same process and sequence of events. Mervyns GI Joes

There’s something to be said for engaging with certain goods before purchase. And certain articles of consumption need to be ascertained by more than just one of the five senses. Not sure whether that includes hot glue refills or bedazzling kits online, but fabric and thread — for sure. My guess is that brick-n-mortars become more of a boutique concern reserved for a certain type of buyer.

A luxury eCommerce site, Matches Fashion, filed for administration in the UK a few days ago. Luxury retail is hurting too because good paying jobs are disappearing everywhere.

I have to laugh reading the comments crying about LBOs and how they ruined America. I have news for you. This country has always been about looting and pillaging on behalf of the oligarchy.

Precisely! Thank you for (sadly) reminding us. Prime contemporary example: groundwater withdrawals in the U.S. Midwest and West. Water users draw draw draw like the FED prints prints prints…

Please name a single empire, throughout history, that wasn’t based on looting, pillaging and thievery.

I used to sew. Make my own clothes. In the 1990’s there still were quality fabric stores. Good stuff. Then the buy outs came. Now fabric is cheap , low quality , ugh. Why go to the trouble of making anything with that. Plus the patterns. Terrible. It’s as though they on purpose make sure the end product does not fit. I only buy European patterns. Classic cuts and they turn out great. Joann’s fabrics are sooo over priced for the low quality. I am not surprised this happened Plus the stores are filled with junkie crafty products. Most of the fabric is for “ quilters”. Low grade cotton / poly

A lot of old standard good quality products have gone to pot in this country due to cheap manufacturing and no quality materials (or quality control) in overseas manufacturing. Try buying some drill bits that can actually cut through mild steel these days.

Gotta make Frankenstein pattern; a mix of your favorite collar, pocket shape, button placket etc. built around a known-good pattern (ex-wife is a master tailor).

I’m sure there’s good stuff out there fabric-wise, but what used to be off-the-shelf awesome is now marketed as boutique or custom.

Honestly, all these complaints about PE firms and whatnot. Look, if you’ve lived in the US during my 50 years, and you haven’t come to the conclusion that sheisters are everywhere, then frankly, you’ve been high. It’s a free market, no one said people had to buy into the IPO. Anyone who did any due diligence knew better.

Look at Macys. How many more downsizings will they have before they give up? They controlled Federated, Consolidated and May Co, but lower sales today in nominal dollars. Less stores too.

Nieman Marcus filed bankruptcy. Super short cash on hand, access to credit. HBC (Saks) is trying to buy but the handlers are too greedy.

Honestly, I love to read about these things because it reminds me that while I’ve missed making money on some of this stuff, I wasn’t wrong about the fundamentals. Who needs malls and plazas? Really, not too many of us.

It’s a shell game, how good is your timing?

Buffalo – re: Macy’s, Wolf has reported here many times on their strong transition to online-their steady march of store closures to be expected…

may we all find a better day.

Sounds like more retailers should put ‘poison pill’ plans firmly in place to dissuade private equity trash from taking over.

But maybe company executive management wants the PE firms to show up when things start to go south to get in on the big payouts?

Is Fisker automotive on your list of imploded stocks? Word is they are preparing for bankruptcy filings. Stock is down more than 99% from the high.

Yes. Here is one from August, on EV startup stocks collapsing, including Fisker:

https://wolfstreet.com/2023/08/09/the-collapse-of-the-ev-spacs-another-one-goes-bankrupt-others-on-the-verge/

The “mallpocalypse” and the long, slow death of so much brick-and-mortar retail presages a similar fate for CRE insofar as it’s office space, since the pandemic accelerated the work-from-home revolution for which the technology already existed and had begun at least as far back as the mid 20-teens.

While I know nothing about h shopping for fabrics, Joann’s business seems like it could be much more efficient as an e-commerce operation:

They have a gazillion different skus for all the different color/size/etc. variations of a product, and most products are very small and light (inexpensive to ship).

It must be a headache keeping each store stocked with exactly the things customers in that area buy (and none of the things they don’t), but having everything in a central warehouse solves this.

I don’t even want to think about the headache that inventory management at these stores must be…

Just an old guy here, mostly ignorant of the workings of high finance, or “smart money”.

Is this a PE business model? Noticed similar patterns over a couple decades. Acquire wobbling, large retailers, borrow maximum out of what’s there to cash in handsomely, then peddle the terminally ill patient off to the public, then bankrupt the whole thing. Last is DIP lenders with super liens on whatever is left over, squeezing the last bits out of the bones before departing.

Not trying to be offensive, but maybe the “P” in PE stands for parasite. Perhaps that is unfair, and maybe these PE firms are just the natural “clean up” teams, a sort of Hospice for poorly run businesses.

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