While it's great U2 raked in $130 million last year as the world's biggest-selling music act, according to Forbes, that sum wouldn't even cover the amount Bono lost on his worst investment.
When Bono bought a stake in private equity firm Elevation Partners in 2004, it gave him a nearly 30% stake in Palm, including stock worth an estimated $325 million. In the pre-iPhone smartphone market, that wasn't too shabby.
When Palm fumbled the Pre, however, and the iPhone surged in market share, that investment started to look a lot more shaky. It got worse when H-P (Stock Quote: HPQ) bought Palm for $1.2 billion last year, but only valued Palm shares at $5.70 when they were trading at $18 just a year before. The whole deal set Bono back $140 million and, while it's tough to top U2's Pop album as a career low point, his disastrous Palm investment trumped it in Bono's typically grand fashion.
Liza Minelli, Uma Thurman, Paul Simon, Tom Brokaw, Harvey Weinstein, et al.
With swarms of predatory "investment advisers" looking to take a chunk of their earnings, it's a wonder more celebrities don't invest in hollowed-out mattresses. Just two years after Madoff was put away for swindling investors with his Ponzi scheme, Kenneth Starr (not the Whitewater independent counsel; the other one) pleaded guilty last year to running a Ponzi scheme that defrauded his celebrity clients out of at least $59 million.
His list of defrauded clients read like the guest list at a gala fundraiser: Actor Uma Thurman, musican Paul Simon, actor and singer Liza Minelli, newsman Tom Brokaw, film producer Harvey Weinstein, talk show host Phil Donohue, singer Carly Simon, photographer Annie Leibovitz, playwright Neil Simon and actor Sylvester Stallone -- who sued Starr in 2002 and claimed his advice caused him to lose $10 million in his restaurant chain Planet Hollywood's stock.
As a reward for their trust, Starr repaid his clients with such dastardly deeds as testifying against Snipes in his tax-evasion trial, bilking 99-year-old heiress Rachel "Bunny" Mellon out of $5 million in a Manhattan apartment deal and tucking away more than $57 million worth of ill-gotten goods in property and bank accounts shared with his wife and former Scores stripper Diane Passage -- including one account in the name of "Poledance Superstar."
Now we're not saying a 66-year-old financial adviser who marries a stripper in her mid-30s and is regularly sued by his clients -- including former radio actor Joan Stanton, who sued Starr for misappropriating "tens of millions" in funds before dying in 2009 at 94 -- is necessarily a bad guy. You just may want to consider all that background before handing him your money.
The good news for Philadelphia Eagles quarterback Michael Vick is that he turned a Comeback Player of the Year season in 2010 into a key to the city of Dallas and a franchise tag from the Eagles that could be worth $16 million to $20 million if the NFL doesn't lock out its players next season. The bad news: The aftermath of his dogfighting conviction and ensuing prison sentence will put almost all of that money into other people's hands.
It's no secret Vick's past cost him endorsement deals with Nike (Stock Quote: NKE) and AirTran (Stock Quote: AAI), more than $60 million of his $130 million contract extension that he signed with the Atlanta Falcons in 2004 and 16 months of his freedom. What's less known is that also left him bankrupt, with roughly $10 million to $50 million in debt. According to the Atlanta Journal Constitution, he's been paying off that debt by keeping only $300,000 of the $6.8 million he made with the Eagles during the past two seasons but has more than $20 million still outstanding. Though he's recovered from his dogfighting conviction professionally, its fallout will likely keep his paycheck on a short leash for the imminent future.
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