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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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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.

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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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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’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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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: ‘I still feel bad — a little bit. I lost some rich people’s money’

After leonardo dicaprio’s starring role as the notorious trader, belfort became famous. now, they are virtually neighbours, he tells michael odell.

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W hen he was the multimillionaire investor known as the Wolf of Wall Street, Jordan Belfort owned a 167ft yacht named Nadine that sank off the coast of Sardinia after an ill-advised voyage in a freak storm. Belfort didn’t need to make that trip. The yacht’s captain had said they shouldn’t. His wife at the time, Nadine, after whom the yacht was renamed — it was originally built for Coco Chanel — said they shouldn’t, but Belfort was “stoned out of his mind” on the sedative Quaalude and experiencing “a frantic need for movement”. He insisted they sail. “Don’t forget I was on a lot of cocaine too,” he says today. “But yeah, my decision-making was definitely off.”

After a 50ft wave wrecked the vessel he

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Jordan Belfort's net worth is currently negative $100 million due to his involvement in fraudulent activities, particularly pump-and-dump schemes conducted through his financial firm, Stratton Oakmont, from 1989 to 1996. Belfort, a former stockbroker and author, defrauded victims of hundreds of millions of dollars, leading to his indictment for securities fraud and money laundering in 1999. Despite his negative net worth, he has reinvented himself as a motivational speaker, charging substantial fees for speaking engagements and seminars.

Jordan Ross Belfort was born in The Bronx, New York, on July 9, 1962. Raised in Bayside, Queens, he initially pursued a career in dentistry but left after one day of classes. Belfort entered the finance world and, after facing setbacks, founded Stratton Oakmont in the early 1990s. Convicted of securities fraud and money laundering in 1999, he served 22 months in prison.

Post-release, Belfort became a motivational speaker through his company, Global Motivation, Inc. He emphasizes the importance of ethics and learning from mistakes in business. Additionally, Belfort is a published author, with memoirs like "The Wolf of Wall Street" and "Catching the Wolf of Wall Street," the former adapted into a film starring Leonardo DiCaprio.

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Belfort owned the luxury yacht "Nadine," built in 1961 for Coco Chanel. Renamed after his second wife, the yacht sank off the coast of Sardinia in June 1996. Belfort admitted to insisting on sailing in high winds against the captain's advice, leading to the vessel's demise. The Italian Navy's special forces rescued all aboard.

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Belfort's rise to success involved founding Stratton Oakmont in the early 1990s, orchestrating pump-and-dump schemes that defrauded investors of hundreds of millions. Legal troubles ensued, and in 1999, he was indicted for securities fraud and money laundering. Belfort's cooperation with the FBI led to a reduced sentence of 22 months in prison. His firm was expelled from the National Association of Securities Dealers in 1996, marking its downfall.

Jordan Belfort's notorious journey towards financial crime started when he founded the firm Stratton Oakmont in 1989. This firm orchestrated elaborate pump-and-dump schemes, through which it defrauded unsuspecting victims of hundreds of millions of dollars. Belfort's primary source of income during this period were the ill-gotten gains from these schemes, which he used to fund a lavish lifestyle.

Belfort's former residence in Long Island, New York, was seized by the federal government in 2001 and sold to compensate fraud victims. The property, initially listed for $3.4 million in 2017, faced price reductions, with the latest known price at $2.89 million in August 2018.

Jordan Belfort's financial journey involved early ventures, including door-to-door meat and seafood sales. Despite bankruptcy at 25, he became a stockbroker, eventually founding Stratton Oakmont. His success was marred by fraudulent practices, resulting in legal consequences and a negative net worth. Belfort has written about his experiences and developed a system of sales advice called the "Straight Line System."

Jordan Belfort's story serves as a cautionary tale about the consequences of financial fraud. Aspiring entrepreneurs can learn from his mistakes, emphasizing the importance of ethical business practices. Belfort's transformation into a motivational speaker and author reflects the possibility of redemption and personal growth after facing legal and financial setbacks.

          View this post on Instagram                       A post shared by Jordan Belfort (@wolfofwallst)

Jordan Belfort, the former stockbroker, was involved in fraudulent activities related to penny stocks through his financial firm, Stratton Oakmont. The firm engaged in pump-and-dump schemes, defrauding investors of hundreds of millions of dollars. Belfort's involvement in such schemes led to his indictment for securities fraud and money laundering in 1999.

Stratton Oakmont, founded by Jordan Belfort, orchestrated pump-and-dump schemes as part of its fraudulent activities. The firm manipulated stock prices, leading to inflated values that benefited Belfort and his associates. This scheme defrauded investors, and Belfort eventually faced legal consequences, serving 22 months in prison and being ordered to pay $110 million in restitution.

Jordan Belfort's personal life has been marked by turmoil. He married Denise Lombardo in 1985, but their marriage ended in 1991. His second marriage, to British-born model Nadine Caridi in 1991, produced two children but ended in divorce in 2005 after allegations of domestic violence. Belfort later married Anne Koppe in 2008, divorced her in 2020, and began dating Cristina Invernizzi in 2021.

Jordan Belfort graduated from American University with a degree in biology. Initially planning to attend dental school, he changed his path after a discouraging speech by the dental school dean. Belfort's career took a different turn when he became a door-to-door meat and seafood salesman before entering the world of finance.

Why is Jordan Belfort's net worth in minus?

Jordan Belfort's net worth is negative $100 million because of his involvement in fraudulent activities.

How accurate is Wolf Of Wall Street?

While "The Wolf of Wall Street" is based on Jordan Belfort's memoir, it takes creative liberties and exaggerates some events.

Did Jordan Belfort lose his money?

Yes, Jordan Belfort lost a significant amount of money due to legal consequences from his fraudulent activities. He was ordered to pay $110 million in restitution to his victims.

How did Jordan Belfort build his net worth?

Jordan Belfort initially built his net worth through fraudulent activities as the founder of Stratton Oakmont, a financial firm engaged in pump-and-dump scheme.

How has Jordan Belfort spent his money?

Jordan Belfort spent his money on a lavish lifestyle, including buying a white Ferrari with his first Wall Street bonus, sinking a 167-foot yacht in a Mediterranean storm, running up a $700,000 hotel bill, and engaging in extravagant activities.

How do people live with a negative net worth?

Individuals with a negative net worth, like Jordan Belfort, may face financial challenges, including difficulties in repaying debts and meeting financial obligations.

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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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Martin Scorsese ‘Kept Fighting’ for ‘Wolf of Wall Street’ Yacht Scene to Be in Final Cut

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Martin Scorsese was determined that “ The Wolf of Wall Street ” would have a sinking ship onscreen.

The blockbuster, Oscar-nominated 2013 film which starred Leonardo DiCaprio as real-life disgraced stockbroker Jordan Belfort, was originally a whopping four hours long. While the film was eventually trimmed down to 180 minutes, screenwriter Terence Winter revealed that Scorsese refused to cut an expensive yacht sequence.

“Because [the script] was so long, you know, the fear was there were going be things that we were gonna have to cut — like the sequence where the boat sinks and they get rescued at sea,” Winter told The Hollywood Reporter . “It was on the chopping block for the longest time because it was so wild and so expensive. To his credit, Marty just kept fighting and said, ‘We have to have that. I have to have that.'”

The scene involves Belfort (DiCaprio) and his wife Naomi ( Margot Robbie ) having to be rescued by helicopter when sailing from Italy to Monaco in a desperate attempt to stop federal investigators from accessing bank accounts.

Related Stories Paul Thomas Anderson’s Next Movie to Open August 2025 in IMAX ‘Killers of the Flower Moon’ Is Martin Scorsese’s Third Film to Go 0-10 at the Oscars

“There was actually a four-hour cut of that movie initially and it was just a lot more insanity — if you can believe there was room for any,” Emmy winner Winter continued. “But I was absolutely thrilled that everything got in there. Every possible thing… including the kitchen sink… is in that movie. I could not have been more happy with it.”

Acclaimed editor and longtime Scorsese collaborator Thelma Schoonmaker previously told IndieWire that the four-hour cut is beloved by those who had seen it, and Scorsese even considered releasing it in two parts. “Well, we thought about it,” Schoonmaker said. “But the film doesn’t work split in half. It has to have a certain arc.”

Actress Robbie recently revealed that the overnight success of “The Wolf of Wall Street” was overwhelming at times, saying, “Something was happening in those early stages and it was all pretty awful. I remember saying to my mom, ‘I don’t think I want to do this.’ And she just looked at me, completely straight-faced, and was like, ‘Darling, I think it’s too late not to.’ That’s when I realized the only way was forward.”

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The Wolf of Wall Street (2013)

Did jordan belfort really meet his future business partner in a restaurant.

What was the name of Belfort's brokerage house?

The Wolf of Wall Street true story confirms that, like in the movie, Stratton Oakmont was the name of the real Jordan Belfort's Long Island, New York brokerage house. Belfort and co-founder Danny Porush (played by Jonah Hill in the movie) chose the name because it sounded prestigious ( NYTimes.com ). The firm would later be accused of manipulating the IPOs of at least 34 companies, including Steve Madden Ltd. (their biggest deal), Dualstar Technologies, Paramount Financial, D.V.I. Financial, M. H. Meyerson & Co., Czech Industries, M.V.S.I. Technology, Questron Technologies, and Etel Communications.

What exactly did Jordan Belfort do that was illegal?

Belfort's Stratton Oakmont brokerage firm ran a classic "pump and dump" operation. Belfort and several of his executives would buy up a particular company's stock and then have an army of brokers (following a script he had prepared) sell it to unsuspecting investors. This would cause the stock to rise, pretty much guaranteeing Belfort and his associates a substantial profit. Soon, the stock would fall back to reality, with the investors bearing a significant loss. -NYTimes.com

How many employees worked for Jordan Belfort's brokerage firm?

At its peak in the 1990s, Stratton Oakmont, Belfort's firm that he co-founded with Danny Porush, employed more than 1,000 brokers. -TheDailyBeast.com

Danny Porush says the movie's dwarf-tossing scene (above) never happened. Even Belfort's book only discusses it as a possibility. Did Jordan Belfort really host an in-office dwarf-tossing competition?

No. "We never abused [or threw] the midgets in the office; we were friendly to them," Danny Porush (the real Donnie Azoff) says. "There was no physical abuse." Porush does admit that the firm hired little people to attend at least one party. Jordan Belfort's memoir The Wolf of Wall Street only discusses the tossing of little people as a possibility, not something that actually happened. -MotherJones.com

During what years did the events in the movie take place?

The events in The Wolf of Wall Street movie took place during the late 1980s and early 1990s. Jordan Belfort and Danny Porush founded the brokerage firm of Stratton Oakmont in the late 1980s. The securities fraud and money laundering charges brought against the firm involved companies that Stratton Oakmont helped raise money for in public stock offerings from 1990 through 1997. In 1996, Stratton Oakmont was banned from the brokerage industry, which eventually forced the company to close its doors. -NYTimes.com

Was Jordan Belfort really known as the "wolf" of Wall Street?

No, at least not according to the former co-founder and president of the Stratton Oakmont brokerage firm, Danny Porush (portrayed by Jonah Hill in the movie). The real Porush says that he is not aware of anyone at the firm calling Jordan the "wolf." Porush says that it's just one of a number of exaggerations and inventions in both Belfort's book and the movie. -MotherJones.com

Is Matthew McConaughey's character, Mark Hanna, based on a real person?

Yes. In exploring The Wolf of Wall Street true story, we learned that Jordan Belfort claims to have met Matthew McConaughey's character's real-life counterpart, Mark Hanna, in 1987 when he was working at the old-money trading firm of L.F. Rothschild. His new acquaintance was an uproarious senior broker at the firm and introduced Belfort to the excess and debauchery that Belfort would later make a daily staple at Stratton Oakmont. Like in the movie, the real Mark Hanna behind McConaughey's character told Belfort that the key to success was masturbation, cocaine and hookers, in addition to making your customers reinvest their winnings so you can collect the commissions. -TheDailyBeast.com

Did Jordan Belfort really abuse cocaine and other drugs?

Yes. In The Wolf of Wall Street movie, Jordan Belfort (Leonardo DiCaprio) is shown snorting cocaine off a prostitute's backside and nearly crashing his private helicopter while high on a cocktail of prescription drugs, including Quaaludes, morphine and Xanax. In researching The Wolf of Wall Street true story, it quickly became clear that Belfort used drugs heavily in real life too. In his memoir, he states that at times he had enough "running through my circulatory system to sedate Guatemala."

Jordan Belfort did give speeches like DiCaprio in the movie (left). Right: The real Belfort speaks at a 1994 Stratton Oakmont Christmas party (right). Did Belfort really stand in front of his employees and give riling speeches with a microphone?

Yes. Belfort was known to stir his troops into action by belting out words of motivation through a microphone. However, his speeches were often filled with more self-adulation than DiCaprio's speeches in the movie.

Did a female employee really let them shave her head for $10,000 to pay for breast implants?

The real Jordan Belfort claims this is true in his memoir. The female employee let them shave off her blonde hair for $10,000, which she used to pay for D-cup breast implants. Co-founder Danny Porush also says that the shaving took place, "...the worst we ever did was shave somebody's head and then pay 'em ten grand for it," says Porush. -MotherJones.com

Was Jordan Belfort's Quaalude dealer in the movie, Brad Bodnick (Jon Bernthal), based on a real person?

Yes. The character in the movie, Brad Bodnick, who has a goatee and is portrayed by The Walking Dead 's Jon Bernthal, is based on Jordan Belfort's real-life Quaalude supplier, Todd Garret. In his memoir, the real Jordan Belfort claims that Garret sold him approximately 10,000 Quaaludes.

Was there ever a chimpanzee in the office?

No. According to co-founder Danny Porush (played by Jonah Hill in the movie), the scene where Leonardo DiCaprio's character pals around with a chimp is pure monkey business. "There was never a chimpanzee in the office," says Porush. "There were no animals in the office...I would also never abuse an animal in any way" (though he does admit to eating the goldfish, see below). -MotherJones.com

Did he really almost crash his helicopter in his yard?

Did Danny Porush really marry his own first cousin?

Yes. According to Jordan Belfort's memoir, the real Donnie Azoff (whose actual name is Danny Porush) did marry his first cousin Nancy "because she was a real piece of ass." After twelve years of marriage, the couple divorced in 1998 after Danny told Nancy that he was in love with another woman ( NYPost.com ). Danny and his ex-wife share three children together.

Did Belfort and his colleagues really have drug-addled nights and sexcapades with prostitutes on a near daily basis?

Though the movie and Belfort's memoir might seem like gross exaggerations of the truth, depicting heavy drug use and sexcapades in the office during trading hours, they're not exaggerations at all says the F.B.I. agent who finally took Belfort into custody, "I tracked this guy for ten years, and everything he wrote is true." Kyle Chandler portrays the agent in the Martin Scorsese movie. -NYTimes.com

Was Belfort really arrested for crashing his Lamborghini while high on expired Quaaludes?

Yes, but according to Belfort the car wasn't a Lamborghini like in the movie, it was a Mercedes. He was so high in a drug daze that he couldn't remember causing several different accidents as he tried to make his way home. In real life, one of the accidents was a head-on collision that actually sent a woman to the hospital. -TheDailyBeast.com

The real Donnie Azoff, Daniel Porush, says that he really did swallow a goldfish like Jonah Hill (pictured). Did Danny Porush really swallow a goldfish?

Yes. According to the real Donnie Azoff, whose actual name is Danny Porush, the scene where Jonah Hill's character eats a goldfish is based on a true story. "I said to one of the brokers, 'If you don't do more business, I'm gonna eat your goldfish!'" Porush recalls. "So I did." -MotherJones.com

Did they really tape money to a woman's body?

In one scene of The Wolf of Wall Street movie, bricks of cash are taped to a Swiss woman's body. "[I] never taped money to boobs," the real Danny Porush says (played by Jonah Hill in the movie). According to Jordan Belfort's memoir, the event did happen but his partner Porush wasn't there. -MotherJones.com

Was footwear mogul Steve Madden really involved in Belfort's scheme?

Yes. As shown in The Wolf of Wall Street movie, Steve Madden had been a childhood friend of Belfort's partner Danny Porush (renamed Donnie Azoff in the movie and portrayed by actor Jonah Hill). Their fondness for drugs and alcohol reunited the two of them. During the initial public offering of his footwear company, Steve Madden Ltd., Madden acquired a large number of shares of his company, which were actually being controlled by Belfort and his firm, Stratton Oakmont. Once shares became available to the public, Stratton Oakmont got down to the business of selling them to unsuspecting suckers. Billing Madden's company as the hottest issue on Wall Street, Belfort's brokers in turn drove up the price. Eventually, Steve Madden was to sell off his shares when the hype was at its peak, just before the stock began its inevitable decline. Similar to what is seen in the movie, Belfort still maintains that Steve Madden tried to steal his Steve Madden shares from him. However, Jordan Belfort did make approximately $23 million in two hours as part of the deal with Steve Madden, who would later be charged as an accomplice to Belfort's scheme. -NYTimes.com For his part, Steve Madden was sentenced to 41 months in prison and was forced to resign as CEO of Steve Madden Ltd. He also resigned from the company's board of directors. However, he did not leave the company entirely. He kept his foot (or shoe) in the door by giving himself the title of creative consultant, for which he was well-compensated even while he was in prison. -Slate.com

Did Jordan Belfort really name his yacht after his wife?

Did Belfort's yacht really sink in a Mediterranean storm?

Yes. In real life, Belfort's 167-foot yacht, which was originally owned by Coco Chanel, sunk off the coast of Italy when Belfort, who was high on drugs at the time, insisted that the captain take the boat through a storm ( TheDailyBeast.com ). Listen to Belfort tell the story during The Room Live 's Jordan Belfort interview . As he states in the interview, his helicopter didn't fall off the boat during the storm like in the movie. Instead, they had to push the helicopter off of the top deck of the boat to make room for the rescue chopper to drop down an Italian Navy commando.

How long did FBI agent Gregory Coleman spend tracking Jordan Belfort and his firm?

FBI agent Gregory Coleman, renamed Patrick Denham for the film and portrayed by actor Kyle Chandler, made tracking Belfort and his firm, Stratton Oakmont, a top priority for six years. In an interview ( watch here ), Coleman says that the factors that drew his attention to the firm were "the flashiness, the brashness of their activities, the blatantness of the way they were soliciting people and cold calling people, and the number of victims that were complaining on a daily basis." -CNBC

Did Jordan really strike his wife?

Yes. The Wolf of Wall Street movie shows Jordan (Leonardo DiCaprio) hitting his wife (Margot Robbie) with his hand and fist. According to his memoir, he actually kicked his wife Nadine down the stairs while he was holding his daughter. She landed on her right side with "tremendous force."

Did Belfort really endanger his 3-year-old daughter's life by crashing his car through the garage door?

Yes. In real life, he put his daughter Chandler in the front seat of the car without a seat belt on, before crashing it through the garage door and then driving full speed into a six-foot-high limestone pillar at the edge of the driveway. Like in the movie, he was high at the time.

Tommy Chong was Jordan Belfort's cellmate in prison and encouraged him to write the book. What was Jordan Belfort's punishment?

When he was finally arrested in 1998 for money laundering and securities fraud, Jordan Belfort was sentenced to four years in prison. This was after agreeing to wear a wire and provide the FBI with information to help prosecute various friends and associates. In the end, the true story reveals that he served only 22 months in a California federal prison. His cellmate in prison was Tommy Chong of "Cheech and Chong" fame, who was serving a nine month sentence for selling bongs. -TheDailyBeast.com

What inspired Jordan Belfort to write his memoir?

It wasn't so much a what as it was a who. Tommy Chong (one half of "Cheech and Chong") was Jordan Belfort's cellmate in prison. After laughing at some of Belfort's stories from his days running the firm, Chong encouraged him to write a book. -TheDailyBeast.com

Why is Jordan Belfort's memoir filled with so many exclamations?

Jordan Belfort attempted to model his writing after Hunter S. Thompson ( Fear and Loathing in Las Vegas ), who was known for using plenty of exclamation points.

What happened to Belfort's partner, Danny Porush, portrayed by Jonah Hill in the movie?

Danny Porush, renamed Donnie Azoff for the movie and played by actor Jonah Hill, served 39 months in prison for his part in the corrupt dealings of Stratton Oakmont, the firm that he co-founded with Jordan Belfort. Porush currently runs a medical supply business in Florida, where he lives with his second wife Lisa in a $4 million mansion. A 2008 Forbes article pointed out his company's fraudulent tactics, which included trying to persuade people to order diabetic supplies and getting them to provide information about their physicians that could be used to bill Medicare. A number of complaints surfaced accusing Porush's company of sending unsolicited packages that were accompanied by unexpected Medicare charges. Back in 2001, Porush was arrested in connection to a fraud scheme surrounding Noble & Perrault Collectibles, a company that sold commemorative coins over the phone. Victims saw their credit cards charged repeatedly, at times for thousands of dollars, while often never receiving any merchandise for purchases that were largely unauthorized to begin with. -Sun Sentinel Enjoying a well-to-do life in Florida, Daniel Porush and his wife drive matching Rolls-Royce Corniche convertibles. With regard to The Wolf of Wall Street movie, Porush said, "I really have no comment other than to say I would never try to profit from a crime I'm so remorseful for." -NYPost.com

I heard that Jordan Belfort is a motivational speaker, is that true?

How much did Jordan Belfort earn from his books and the movie?

Catching the Wolf of Wall Street includes more of Belfort's outrageous stories that were not included in his first book. As we investigated The Wolf of Wall Street true story, we discovered that Jordan's books, The Wolf of Wall Street and Catching the Wolf of Wall Street , netted him a $1 million advance from Random House. He also earned $1 million for the film rights to his story ( TheDailyBeast.com ). In a response to criticism over these profits and future profits from the movie, Jordan Belfort said the following via his Facebook page, "I am not turning over 50% of the profits of the books and the movie, which was what the government had wanted me to do. Instead, I insisted on turning over 100% of the profits of both books and the movie, which is to say, I am not making a single dime on any of this." According to Jordan, the money is being used to pay back the millions still owed to those who were scammed by his brokerage firm Stratton Oakmont.

Does Jordan Belfort have a cameo in The Wolf of Wall Street movie?

Yes, the real Jordan Belfort appears at the end of the movie as the person who introduces Leonardo DiCaprio's character before he takes the stage at his Straight Line seminar.

Have any other movies been based on Jordan Belfort's story?

Yes, but only loosely. The brokerage firm in the movie Boiler Room , released in 2000, was inspired by the illegal practices of Jordan Belfort's Stratton Oakmont firm. In the movie, actor Ben Affleck portrays Jim Young, the Belfort-esque co-founder of the firm, who, like Jordan Belfort, trains his brokers in the "pump and dump" scheme. -NYTimes.com

Watch The Wolf of Wall Street movie trailer. Also, view Jordan Belfort interviews and home video footage of him speaking at a Stratton Oakmont party in the 1990s.

• Jordan Belfort's Website
• Danny Porush's Website (played by Jonah Hill)
• Mark Hanna's Website (played by Matthew McConaughey)
• The Wolf of Wall Street Official Paramount Movie Site

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

Home » Movie Soundtracks

The Wolf of Wall Street Soundtrack: Listen to all 42 songs with scene descriptions

Each song is provided with a scene description and timestamp, as well as a full-length audio playback.

Note: Below is a complete playlist of all 42 songs that can be heard in the movie “The Wolf of Wall Street”. Some of these commercial songs are not included on the official soundtrack album but are used in the movie.

All 42 songs featured in “The Wolf of Wall Street”:

What’s the movie about? The film is set in the early 90s. Jordan Belfort (Leonardo DiCaprio) founds the brokerage firm “Stratton Oakmont” in his early 20s. He quickly rises to become a multimillionaire. He has a dissolute lifestyle characterized by alcohol, drugs, sex and decadence. Driven by insatiable greed and with a sense of invincibility behind him, he and his “wolf gang”, including his buddy Donnie Azoff (Jonah Hill), get involved in illegal business. This soon attracts the attention of the law, especially FBI agent Patrick Denham (Kyle Chandler) looking intently behind the facade of Belfort’s corporate web. As law enforcement slowly gets wise to Jordan, his entire house of cards threatens to collapse.

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Meet the ‘Witch of Wall Street,’ a black-clad pioneering value investor who became the world’s richest woman—but is wrongly remembered as a cheapskate

Hetty Green isn’t a name you hear a lot these days—but it should be. The whaling heiress turned investing guru was making millions and dishing out sage advice on Wall Street decades before the man known as the greatest investor of our era, Warren Buffett, was even born. And when Benjamin Graham, Buffett’s hero and the man they call “the Father of value investing,” was in grade school, Green had already made millions buying Civil War bonds, railroad stocks, and mines. She made a killing in mortgage lending, too—never charging excessive interest, but likewise unafraid to foreclose if she wasn’t receiving payments.

Always a saver with extra cash on hand, Green lent freely to American businessmen, investors, and even the city of New York during times of need. And through it all, she preached many of the common sense, so-called “value” investing tips that Graham spent his career detailing—the same ones you often hear Buffett espouse today. But the Massachusetts native-turned-New Yorker was a working mother, and her fierce disposition and unwillingness to comport with what was believed to be a woman’s place led to her estrangement from a society where she had few contemporaries. 

There’s even a story about how Green pulled a gun on her rival, the railroad magnate Collis Potter Huntington, after he threatened her son Ned over a railroad dispute in Texas.  “Up to now Huntington, you have dealt with Hetty Green the business woman. Now you are fighting Hetty Green the mother,” she reportedly said. “Harm one hair of Ned’s head, and I’ll put a bullet through your heart.” 

Green made a fortune (and a few enemies) by sticking to disciplined investing principles that have become common today. However, she is mostly remembered for penny pinching and her choice to repeatedly wear the same black dress and veil later in life, something that led her to garner unfavorable nicknames like “the world’s greatest miser” and “the Witch of Wall Street.”

But Hetty Green’s true story is far more complex, and her nature much more generous, than the media of the late 1800s and early 1900s portrayed. If she were around today, she would be easily compared to Buffett and other great investors of our era.

Long before women were even given the right to vote, Green was a titan in a male-dominated field, earning the respect of the likes of John Pierpont Morgan, the American financier who founded what is now JPMorgan Chase . It’s no wonder why, really. Although she was known for her frugal nature, when the chips were down on Wall Street, investors turned to Hetty Green—and not just for money to save their businesses, but also for advice. To say that was rare during the Gilded age of the late 1800s is understating it.

When Green died in July 1916, as the New York Times put it in her obituary , she was “generally believed to be the world’s richest woman,” having amassed a fortune of $200 million, or nearly $6 billion today. From helping to save New York City during the 1907 panic to pulling a gun on a man who had threatened her son, Hetty Green was a complex character whose legacy has, in many ways, been tainted by biased coverage that focused on her miserliness. 

The real “Witch of Wall Street,” while undeniably cheap, wasn’t a witch at all, more like an independent investing genius. As Charles Slack, who wrote a book on Green titled Hetty: The Genius and Madness of America’s First Female Tycoon , put it in an interview with Fortune : “She had the courage to live as she chose.”

Green only followed conventions that “seemed to her right and useful, coldly and calmly ignoring all the others,” he added. 

This is the tale of the misunderstood “Witch of Wall Street,” whose tips for making money and thriving in our complex world are as relevant today as they were over 100 years ago.

Understanding the ‘Witch of Wall Street’

Henrietta (Hetty) Howland Robinson Green was born in 1834 in New Bedford, Massachusetts. The daughter of a conservative Quaker family that owned the largest whaling fleet in the city, Green learned about finance and trade from a young age, becoming the family’s bookkeeper by age 13.

After attending a strict boarding school, Hetty went on to help her father with their businesses in New York City when he sold his whaling enterprise. There she met and married Edward Henry Green, a partner in a trading business. The two would go on to have two children, Edward and Harriet.

When Green’s father died in 1865, she inherited around $5.9 million, or roughly $95 million today. The issue was $5 million of that money was locked in a trust that only gave her rights to its income. Even so, Green began buying stocks with what she had, conducting detailed research on companies to find those with the best “value” within the market. She always looked for “underpriced stocks” and “was far less concerned with which way the market was heading,” according to Slack, her biographer.

Green’s investing strategies paralleled those that Graham described in his 1949 book, Intelligent Investor , which has become a bible to many in the “value investing” community. Doing your homework, looking for quality companies, avoiding overvalued momentum stocks, these were all Hetty Green principles that Graham only detailed decades later.

Green was ahead of her time in many ways. She always avoided the use of leverage when investing, for example, something that Warren Buffett has recommended throughout his career. Graham failed to avoid it in the 1920s, leading to some dismal years for his fund during the Great Depression. 

Despite Green’s modern investing strategies that are still relevant today, it is her thorny personality traits that have caught history’s attention more than anything.

The investing legend was certainly frugal and not known for her kind nature. Newspapers made claims about her living in broken-down apartments; wearing cheap dresses until they ripped at the seams; and avoiding using hot water to save money—all while she was a millionaire many times over. “One of the persistent stories is that her son Ned had to have his leg cut off because she was too cheap to get it treated,” Slack noted.

But the biographer explained that this story really isn’t true. Green did what she could to have her son’s leg treated, despite her distrust for doctors—she hated politicians, lawyers, and journalists, too. “She loved her son, and she tried a number of remedies over the years,” Slack said. “It wasn’t this sort of stark tale of cruelty we hear.” 

The reality is, Green was often crass, cheap, and hard-headed, but despite all the stories about her cruel-hearted nature, she was also a brilliant investor, cunning businesswoman, and (mostly) loving mother who was decades ahead of her time. 

So why is she remembered only as the world’s greatest miser?

“I think men of that era, who are very successful in business, tend to get viewed first by their business genius, and later by their personal eccentricities. And I think for Hetty, because she was a woman, she tended to get viewed by her personal characteristics first of all, and her financial genius was an afterthought,” Slack said.

Hetty herself argued that she was a victim of bad press. “I am not a hard woman, but because I do not have a secretary to announce every kind act I perform, I am called close and mean and stingy,” she once told reporters , adding that: “I am a Quaker, and I am trying to live up to the tenets of the faith. That is why I dress plainly and live quietly. No other kind of life would please me.”

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

By Morey Stettner

Do films about money offer investing truths or are they just Hollywood stories?

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 SPX, 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,' 'Shogun' highlight a blockbuster March for streaming

-Morey Stettner

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

03-16-24 1650ET

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Wolf Street

Brick-and-mortar meltdown fells another retailer: joann inc. files for bankruptcy 3 years after ipo, by wolf richter •  mar 18, 2024  •  81 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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  81 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

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…..

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.

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.

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.

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?

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..

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.

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…

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…

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