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OSU's $165 M Pickens Gift Gone

Rraalph 3000

Well-Known Member
Jacked this from a Mizzou board, but thought it was pretty interesting:

http://www.tigerboard.com/boards/missouri-tigers.php?message=6021213

Today the news was a little more grim, as officials were told that actually, the entire $ 165 million donation, and the earnings, which once inflated the gift to over $ 300 million, had recently been eliminated by margin calls due to drastically falling oil prices.

As of Monday OSU's gift had flat-lined completely and was declared 'gone.'

So essentially, OSU will begin sucking again shortly :lol:
 
If that article is accurate, that's hilarious. What a colossal mismanagement. Why would they leave everything in one fund? I don't care that it's T. Boone's fund, you diversify your holdings when you get a giant gift like that.

Heads will roll. And Oklahoma taxpayers will end up paying for the stadium renovations (money was borrowed with the fund as collateral).
 
Heads will roll. And Oklahoma taxpayers will end up paying for the stadium renovations (money was borrowed with the fund as collateral).

No doubt...that was the biggest deal I saw...the $13M interest payment each year to pay for their renovations that they thought was already paid for....:lol:
 
If that article is accurate, that's hilarious. What a colossal mismanagement. Why would they leave everything in one fund? I don't care that it's T. Boone's fund, you diversify your holdings when you get a giant gift like that.

It looks like some peopel tried to get them to cash out but they didn't, a stop loss would have been a good move.
 
Heads will roll. And Oklahoma taxpayers will end up paying for the stadium renovations (money was borrowed with the fund as collateral).

Would that be the margin accounts that were called, or had they leveraged the fund beyond the money borrowed for the stadium renovations?? :confused:
 
Would that be the margin accounts that were called, or had they leveraged the fund beyond the money borrowed for the stadium renovations?? :confused:

Sounds like the money was left in T. Boone's fund, which was leveraged. The quick drop in oil prices caused margin calls on the fund. The stadium financing was also borrowed, using the fund as collateral.

So they've got a bunch of debt and no money to pay for it.
 
If that article is accurate, that's hilarious. What a colossal mismanagement. Why would they leave everything in one fund? I don't care that it's T. Boone's fund, you diversify your holdings when you get a giant gift like that.

Heads will roll. And Oklahoma taxpayers will end up paying for the stadium renovations (money was borrowed with the fund as collateral).

This would be the very defnition of a Boone-doggle.

Q: How do you make a small fortune?
A: Give Oklahoma State University a large one.

But considering the Tigerboard has less credibility than the Onion, I'm going to need to see this from a more credible source before cranking up the Okie Lite freudenschade.
 
This would be the very defnition of a Boone-doggle.

Q: How do you make a small fortune?
A: Give Oklahoma State University a large one.

But considering the Tigerboard has less credibility than the Onion, I'm going to need to see this from a more credible source before cranking up the Okie Lite freudenschade.


http://www.nytimes.com/2008/10/21/sports/21boosters.html?em

"Those funds, along with $37 million from other donors, were invested in BP Capital Management, a hedge fund controlled by Pickens. At the time, it looked like a windfall that would keep on giving. Instead, Pickens recently acknowledged that his investments had lost $1 billion this year amid the financial crisis"
 
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http://www.nytimes.com/2008/10/21/sports/21boosters.html?em

"Those funds, along with $37 million from other donors, were invested in BP Capital Management, a hedge fund controlled by Pickens. At the time, it looked like a windfall that would keep on giving. Instead, Pickens recently acknowledged that his investments had lost $1 billion this year amid the financial crisis"

If the money was gone, the fund would be tits-up. I suspect some of the money is still there, although who knows how much.
 
If the money was gone, the fund would be tits-up. I suspect some of the money is still there, although who knows how much.


and the value should come back over time but if they need the funds now they are ****ed.
 

Chip,
When does your decapitating avatar get the Mizzou update?

Oh yeah, it's intersting that the Gray Lady breaks the OSU story. I'd think the Oklahoma press would have been all over this. The NYT is the only source that comes up when googling OSU, gift, Pickens, oil futures, loss.

Where is Fox News on this story? LOL.
 
Oh yeah, it's intersting that the Gray Lady breaks the OSU story. I'd think the Oklahoma press would have been all over this. The NYT is the only source that comes up when googling OSU, gift, Pickens, oil futures, loss.

Unlike here in Colorado, the local press in Oklahoma actuall LIKES their state universities.
 
Unlike here in Colorado, the local press in Oklahoma actuall LIKES their state universities.

Unless one of the reporters see the blue chip QB blubbering and drinking chicken soup from mommy's cup.
 
I mentioned this on the "other" board as well. Pickens was on CNBC a couple of days ago and was asked about it. He said most of the profits were gone, but not the original investment. He also said he wouldn't be surprised if the school took some of the money and put it somewhere else.
 
If that article is accurate, that's hilarious. What a colossal mismanagement. Why would they leave everything in one fund? I don't care that it's T. Boone's fund, you diversify your holdings when you get a giant gift like that.

Heads will roll. And Oklahoma taxpayers will end up paying for the stadium renovations (money was borrowed with the fund as collateral).

Its more widespread than you think....

Kirk Kerkorian's Tracinda Corp. disclosed it sold off 7.3 million shares in Ford Motor (F) and may sell the rest of its stake in the automaker. Originally valued at almost $1 billion, Kerkorian's stake has lost more than two-thirds of its value as Ford's stock price has plummeted. It closed Tuesday at 2.17 a share, down 7% for the day. Though the exact reasons for Kerkorian's sale aren't clear, he had borrowed $600 million to buy the Ford stake and recently needed to use casino holdings to back that debt.

KERKORIAN HAS PLENTY OF COMPANY
All in all, it's been a bad month for billionaires.

First Sumner Redstone, chairman of Viacom (VIAB) and CBS (CBS), sold $233 million in stock to help cover a loan. Then John Malone, chairman of Liberty Media (LCAPA), sold $49.5 million in stock to pay back a loan to Bank of America (BAC).

Chesapeake Energy (CHK) Chief Executive Aubrey McClendon may be the worst hit by this sort of stock squeeze. As Chesapeake's stock surged higher, the firm's enthusiastic founder borrowed to buy more and more shares. That worked until the middle of 2008: Since the beginning of July, Chesapeake shares have slid almost 65%. From Oct. 8-10, McClendon was forced to unload $569 million in his company's stock, or 94% of his stake in the firm, to cover those debts.

"The CEOs have been dreadfully surprised—just like the rest of the world," says Rawley Thomas of the Financial Management Association, an organization of financial professionals and academics.

SELLING DURING A FREE FALL
Indeed, several top corporate executives have dumped big portions of their company holdings, as identified by InsiderScore.com's Silverman, based on SEC filings that indicate these shares were sold to meet margin calls. Many of these sales occurred the week of Oct. 10, the worst week ever for the Dow Jones industrial average, which dropped 18.15%. Those include:

• Marvin Herb, a director at large bottling firm Coca-Cola Enterprises (CCE), who sold $17.7 million worth of shares Oct. 8-9.

• The co-founders of Boston Scientific (BSX), Peter Nicholas and John Abele, who sold off a combined $292 million in shares Oct. 8-17.

• Mark Grier, vice chairman of Prudential Financial (PRU), who sold off $1.75 million in shares on Oct. 10.

• Scholastic (SCHL) Chairman and CEO Richard Robinson, who sold shares valued at $3.1 million on Oct. 10.

• Tesoro (TSO) Chairman and Chief Executive Bruce Smith, who sold $2.2 million in shares on Oct. 10.

• Williams-Sonoma (WSM) Chairman and Chief Executive Howard Lester, who dropped $12.98 million in shares of his firm Oct. 13-14.

• XTO Energy (XTO) co-founder, Chairman and Chief Executive Bob Simpson, who sold off $101.3 million in his company's stock from Oct. 6-7.

SALES WERE ALMOST ALL INVOLUNTARY
When executives sell off such big stakes, they often try to reassure investors that they haven't lost faith in the company. On Oct. 16, after Micki Hidayatallah, chairman and chief executive of Allis-Chalmers Energy (ALY), had to sell off 400,000 shares to cover a margin loan, he issued a statement: "My sale of shares in no way reflects my views of Allis-Chalmers' current financial position or future performance." Allis-Chalmers shares had lost half of their value in a month, forcing his sale.

These sales were almost entirely involuntary, says Silverman, caused by the steep drop in stock prices over the past month

http://www.businessweek.com/investo...1021_096277.htm?campaign_id=widget_topStories
 
Unlike here in Colorado, the local press in Oklahoma actuall LIKES their state universities.

Mike Gundy disagrees.

mikegundy.jpg
 
I filled up my 23 gallon truck today for under $60 today and shed large Cowboy-sized tears for Boone the entire time.:smile2:
 
Its more widespread than you think....

Amazingly, many wealthy people like to use debt to finance their lifestlye so they don't have to liquidate stock. Thankfully, none of my clients are in that boat, but the amount that are heavily leveraged would shock you.

EDIT: There are many more who are liquid who had margin calls (and either had to pay off loans or provide more collateral) recently as well.
 
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