Claudia Is Worried I Will Be Killed for Posting This

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I stopped a ten million dollar robbery last week.

For various reasons, including Claudia is slightly worried I could get killed, I am changing all of the names. All of the other details are intact.

A few weeks ago, a guy claiming to be related to Middle Eastern royalty, (call him “M”), had a representative (a friend of a friend of a friend) call me and ask me if I knew anyone who would lend M ten million dollars.

“He has collateral,” the rep said: “$25 million in restricted shares of [well known private Internet company].“

So I called a fund I used to be an investor in. They were interested and made an offer. Call the fund manager, “Bill”.

Bill said, “We’ll lend $10 million IF we get the full $25 million on any default.” Here were the other terms Bill said.

- 15% interest, paid quarterly- the full loan is due back in two years- $600,000 fee paid to Bill up front.- Bill wanted 25% of all the upside on the full $25 million in shares for the next ten years.

I had never seen a term in a loan like that last one but I give Bill credit. Why not ask for it? In a negotiation it never hurts to ask for anything.

M said, “yes”. He needed the money fast for some real estate he wanted to buy.

Bill began his due diligence. M sent a fax picture of the shares. His lawyers sent over all the contracts M had signed to get those shares. M even wired $15,000 to Bill to pay for Bill’s legal fees. M wanted no hurdles to getting the deal done. Lawyers on both sides were busy every day all day, working out the details.

Bill said to M: I need permission from the internet company that I would be the potential shareholder if you default.

It took a day but M sent over a letter. It was written on the Internet company’s letterhead, signed by the company’s “Director of Investor Relations” giving Bill permission to control the shares in a default and “call me at XYZ phone number if you have any questions.”

By coincidence, I knew the Director of Investor Relations but hadn’t spoken to him in a year or so.

Finally, last Friday, Bill calls me in the morning. He was about to wire ten million dollars to M.

“I don’t know,” Bill said, “I have to tell you, James, something seems funny.”

“What?”

“The letter from the head of investor relations at the company. It almost seemed too simple. Why didn’t he throw in a line indemnifying the company?”

“I don’t know,” I said. I had no clue. “Is that standard?”

“I don’t know either,” Bill said and he sort of drifted, “I just don’t know. But something makes me feel funny.”

“I have an idea,” I said, “I know the guy who wrote that letter. I’ll write to him and ask him if he wrote that letter. This way he independently verifies.”

Bill said, “ok, do it.” So I did.

I didn’t hear back. Bill called again two hours later.

Bill said, “look, let’s call up the number on this letter. You stay quiet.”

So Bill called and someone picked up and said he was “X”, the head of investor relations for this company. I’ve spoken to X a few times before. The voice did not sound like X but it had been awhile.

Bill and X started talking about the letter. Then Bill said, “hey, by the way, I have your friend, James Altucher on the line to say Hi.”

CLICK.

Dial tone.

“We got disconnected,” I said.

Bill started laughing.

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The Best of James Altucher

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