Business Winners And Losers Of 2006

Warren Buffett, Bill & Melinda Gates News Conference CBS

Before 2006, if someone in the business world mentioned "backdated options," you'd be forgiven for thinking they were making a joke about Steve Jobs' necktie collection.

But in 2006, the big losers were defined by the scandal that erupted over executives who received big paydays due to stock options backdated to low points in a company's stock price. In the winners' column, there were the obligatory Internet whiz kids who made a billion, and some big surprises, including a disgraced banker who found redemption.

The stories of 2006 unfolded with more twists than a Hollywood thriller, giving plenty of fodder for "based on a true story" scripts.

WINNER: Warren Buffett

This tale was meant to be a buddy flick: The world's second-richest man hands most of his fortune over to the world's richest man and his charity. In the case of Buffett, who turned Bill Gates on to bridge and plays the game with the Microsoft Corp. chairman regularly, the movie's climax naturally would occur at a card table.

A silver-haired Buffett, played by Steve Martin, vows that the young whippersnapper will never beat the old master. Buffett's bridge partner persuades him to lay down a bet of 10 million Class B shares of Berkshire Hathaway Inc., worth $31 billion.

Cut to a close-up of Gates, smiling fiendishly as he hands out Xboxes to a line of orphans some 100 million deep.

OK, that's just the Hollywood version. However it really happened, Buffett's generosity proved there's nothing Class B about this guy.

Suggested movie title: "Bill and Warren's Excellent Adventure."

LOSER: Jacob "Kobi" Alexander

Of all the executives bounced from their jobs due to the options scandal, Alexander stands out for his boldness. When the stuff hit the fan, Alexander, ex-CEO of software company Comverse Technology Inc., decided to hightail it out of the country.

He finally was found in the southern African nation of Namibia, where he spread $1.5 million around to local businesses.

The locals are in no hurry to send him back to the U.S. Alexander was arrested Sept. 26 by Namibian authorities at the request of the FBI. But he was freed on bail and the magistrate said they'd wait until the end of April or so to decide on whether to ship him back to the States.

The feds could probably get Alexander out faster if they sent Madonna over there to adopt him.

Suggested movie title: "Backdated Earnings of America for Make Benefit Glorious Nation of Namibia."

WINNER: The YouTube dudes

Fuzzy videos of people spewing Diet Coke and Mentos from their mouths like some sort of dork volcano. A Korean teenager with a webcam performs a classical music masterpiece on his electric guitar and is hailed as the messiah of heavy metal. And a home is given to every blooper, blunder and drunken Danny DeVito interview ever to air on network TV.

YouTube is like a "combination of 'America's Funniest Home Videos' and 'Entertainment Tonight,' " is how Chad Hurley described the site he and Steve Chen created.

In the type of dotcom-riches tale that had become rarer in the Bay Area than an NFL playoff game, Chen and Hurley sold the site to Sergey Brin and Larry Page's Google Inc. this fall for stock valued then at $1.65 billion.

They and the site's other investors may not see every dime, however. Apparently worried about copyright liabilities, Google set aside more than $200 million of the payment in case the Mentos lawyers come looking for a cut.

Suggested title: "When Larry Met Hurley."

LOSER: Nicholas Maounis

Next time you are hurting after a bad day on the stock market or an all-nighter with Danny DeVito, consider the year Maounis had. His hedge fund, Amaranth Advisors, lost more than $6 billion in a matter of days due to bad natural gas trades.

"We feel bad about losing our own money," Maounis told investors on a conference call, according to Dow Jones Newswires. "We feel much worse about losing your money."

Suggested title: "Honey, I Shrunk the Portfolio."
  • Nicola Menzie

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