The billionaire investor Joe Lewis is often referred to as "The Boxer", a nickname which is both a tribute to a no-nonsense approach to making money and a nod to the legendary heavyweight slugger of the same name. Yesterday, as the astonishing sell-off of the Wall Street bank Bear Stearns made headlines across the world, The Boxer appeared to be lying on the canvas, floored by a sucker-punch that could cost him close to a billion dollars.
An East End boy made good, Mr Lewis has a network of interests across the globe, controls Tottenham Hotspur Football Club and counts Tiger Woods among his personal friends. Born in Bow, he began his first career as a waiter when he dropped out of school at 15 to work in his father's catering operation. He expanded the business and sold it in 1979, before moving to the Bahamas to become a currency trader. His mansion in Lyford Cay is still said to have a screen in every room with all the latest market movements. Yesterday, they will have made catastrophic viewing.
During the course of the past six months, Mr Lewis had become the second largest shareholder in Bear Stearns with a 9.36 per cent stake, according to the company's register. If the rumours that he sold his stake on Friday prove false – a sale that would still translate into a significant hit on his investment – his holding has fallen from a value of $967.8m (£484m) on Christmas Eve, to $22.1m under the terms of JP Morgan's offer.
The financier started building his holding in the beleaguered bank last September. It was known that Bear Stearns had been badly hit with the onset of the credit crunch last summer. Bear's share price had spiralled downwards as it revealed its initial losses brought on by the US sub-prime crisis. Mr Lewis's $860m investment, which translated into a 7 per cent stake, was a bet that Bear had hit rock bottom. He continued building his stake, with the last acquisition recorded on 24 December of a further 1.8 million shares.
The Briton has made his fortune from such risky bets. He made hundreds of millions of pounds, along with the legendary investor George Soros, by betting on sterling's exit from the exchange-rate mechanism on Black Wednesday in 1992. He amassed further millions on a bet against the Mexican peso, which collapsed three years later.
The Bear Stearns gamble, however, was about to spectacularly backfire. The bank finally sank on Sunday night after an emergency bailout two days before, when it agreed to an all-share takeover approach from its Wall Street rival JP Morgan Chase. The offer valued Bear at $230m, or $2 per share. In January 2007, those shares were worth $170 each.
Mr Lewis told CNBC: "I think it is a derisory offer and I don't think they will get shareholder approval."
For Mr Lewis it is doubtless a blow, but hardly a fatal one. He also runs the investment vehicle Tavistock Group, which has interests in 170 companies across 15 countries. These include stakes in the sportswear group Puma, the shoemaker Vans and Bristol Cars. As well as Tottenham, the group has a stake in the Czech football club Slavia Prague, but the boss is known to prefer golf. Mr Lewis once paid $1.4m to partner Tiger Woods at a charity event, and has launched a golf resort in the Bahamas with Woods and the golfer Ernie Els. Last year, Mr Lewis was rated as the world's 369th richest person by Forbes magazine, with a personal fortune of $2.5bn. That, of course, was before the Bear Stearns deal.
It was not only Mr Lewis who had a bad day yesterday. The 14,000 Bear Stearns employees woke up to find fresh scrutiny over their jobs, but they have also lost an estimated $5bn from the terms of the merger as they hold more than a third of the stock. The bank's chairman and chief executive, James Cayne, is the fourth largest shareholder on the register, with a holding of almost 5 per cent.