Cutting off one's nose to spite one's face

Beyond Meat COO bites someone's nose; the fake billionaire rabbi, and more

If you are the COO of a major alternative meat company, and you go to a college football game, and you end up biting someone’s nose — well, isn’t that a little on the nose? The cannibal jokes here are myriad and I will let you fill them in yourself.

I mean —

Mr. Ramsey got into a fight with another male in a parking garage near the University of Arkansas football stadium on Saturday night following a traffic dispute. During the incident, Mr. Ramsey punched through the back windshield of the other individual’s Subaru, the report said. The incident followed a University of Arkansas football game. 

“The owner got out and the victim stated Mr. Ramsey pulled him in close and started punching his body,” the arresting officer wrote in the report, referring to the owner of the Subaru. “Mr. Ramsey also bit the owner’s nose, ripping the flesh on the tip of the nose.”

I mean; what is the corporate governance here? “Listen — we’re really sorry about the nose-biting thing, you know, literally trying to get some flesh from our COO, for our company which, famously, does not utilise flesh”. I don’t know; that doesn’t look good to me! He isn’t Mike Tyson! COO’s should probably not engage in this behaviour! Beyond Meat is also a famously unprofitable company which has seen its value decline by about ~75% YtD. If I were the COO, I’m not sure if I would be going around biting noses and having traffic disputes. I might be trying to sell more fake meat patties or whatever. The market felt the same and the stock fell about -6% today. I don’t know what to say here other than the whole thing feels a little like we’ve entered into a wholly post-QEII world where executives bite noses and then go to jail and list their occupation as “COO” (question for the police here: did they believe him, or did they think he was a con-man or drunk hick taking the piss? Please write in if you know).

Scam Artist/Exec-continuum

One of my pet theories is that the line between an executive and a scam artist is very thin and grey. You have the guy at Nikola who rolled a truck with no engine down a hill and say, hey, look at my truck — look how well it runs. You have Elon, of course, who says things like “we will have self-driving cars by 2022” or whatever. You have Elizabeth Holmes, who builds a fake blood testing machine; and you have Adam Neumann who didn’t commit fraud per se but whose behaviour certainly felt a little “scammy”. Where is the line? I mean — Elon says a lot of shit, but we do have Teslas on the road. This goes back to my last question — did the police arresting the Beyond Meat guy really believe he is a COO or did they think he was a crank; the line is very blurry!

Anyway — speaking of blurry lines and obvious cranks — a fake billionaire rabbi launched a fake $290 million dollar bid for the bankrupt American dept. store Lord & Taylor.

Lewis was arrested in August and accused of faking a $290 million bid in bankruptcy court for Lord & Taylor, the nearly 200-year-old department store chain that went under in 2020.  

It was quite a run. The rabbi claimed to hail from London and said he operated a secretive family investment firm, Neviim Equity, out of offices in Beverly Hills. Lion statues and a fountain front the stately building on Wilshire Boulevard. Wearing a flowing beard and a dark suit crowned by a black hat, he boasted that he was worth $10 billion, $18 billion or even $30 billion, depending on who he was talking to.

If this was the entire story that’d be kind of good enough — if you are approached by a guy saying he is a billionaire rabbi and he is confident enough, you might think, sure! That’s plausible! That sits, like, well enough on the plausible exec-to-conman continuum. But:

Lewis variously claimed to have worked for the Central Intelligence Agency, the US Secret Service and the Los Angeles Police Department. He allegedly told one mark that he used astrological charts to help pick the jury for the 1995 O.J. Simpson double-murder trial. 

At this point, if you are a mark, or if you are the hallowed bankrupt dept. store Lord & Taylor, you might be thinking — ok, this guy is a crank. Part of the “genius” of actual frauds like Elizabeth Holmes is that they appealed to rich people’s sense of safety and legitimacy. A guy saying he used astrological charts to pick the OJ Simpson jury doesn’t quite fit the bill. But he made a bid for Lord and Taylor anyway:

Lewis apparently was convincing enough for the bankrupt Lord & Taylor to spend weeks entertaining his pitch. During one call with the department store’s representatives, he also claimed to have a PhD in theoretical mathematics, as well as master’s degrees in neurophysics, genetics and quantum physics.

I love this so much. I love that this guy dressed as a rabbi had the sheer chutzpah to say, yeah, I’ve got three master’s degrees in Very Hard Fields and also this PhD; anyway, about buying your company. What was going on here? Did anyone say, hey, this guy is maybe full of it? Or did the Lord & Taylor people just nod serenely, as if it is perfectly feasible and normal to have all these degrees and also assist the FBI and so on. We talk a lot about “due diligence” in finance and how it is (and isn’t) done. If an astrological rabbi is offering to buy your bankrupt company for far more than it last sold for ($12 million) your heckles should be raised or, quite frankly, you deserve to be scammed.

And I mean, this wasn’t a case of the company considering it for one day and then going “nah, get outta here”.

Lord & Taylor, its lawyers, bankers and other advisers spent much of August 2020 in calls with Getz and his people, doing due diligence and trying to figure out if the deal was workable. 

I imagine a conversation like this:

Lord & Taylor: So hey, we’re looking at the deal terms and —

Rabbi: It’s not workable today; mercury is in retrograde

Lord & Taylor: We’re just wondering —

Rabbi: Excuse me, I need to go assist the FBI and build a time machine for them. I have several degrees in this field, as you know.

And I imagine the Lord & Taylor lawyers and accountants kind of shrugging in their cheap polyester suits and going, well, rich people, whatareyougonnado? In a sense, I wish they had just given the rabbi the company. I mean, if your company is bankrupt and you’re not doing anything with it, the least you could do is give it to an astrological rabbi and hope it becomes a meme stock. This is capital allocation in 2022.

Speaking of due diligence

CCHL, the company that owns the bulk of Christchurch Council’s commercial assets, hired a guy without doing a lot of due dilligence. The most damning information that has come to light is Boyd, guy in question, has aprox. ~US$17.5 million of outstanding judgements against him in three separate courts. He also started a failed business called Best Friends Credit which provided unsecured loans to people for vet bills. The Texas businessman who funded that would, unsurprisingly, like his money back. This is, obviously, a Very Bad look for Christchurch Council and seems to be a running theme with multiple councils. But what stands out to me is this common thread of “he’s a smooth talker, he can talk the talk, he’s very eloquent”. Shades of Madoff.