He was a wunderkind, easily the man the market once watched for the next big move. This gentleman had the audacity to bet against sub-prime mortgage debt and ended up netted almost three quarters of a million dollars on an $1,100 investment. Depending on which rumor you want to follow, he took a chance on some risky Greek CDs and ended up with between $3 and $15 billion.
Oh, how the times have changed.
In 2006, Kyle Bass founded Hayman Capital Management. He made a fortune and became a Wall Street superstar. Unfortunately, Bass’ career has been compared to that of Hollywood film director M. Night Shayamalan, who rocked the world after coming out of nowhere with The Sixth Sense before releasing a series of commercial and/or critical disappointments. As fast as Bass turned into a miracle worker, he flipped the switch, consistently making one WTF move after another.
Bass saw his fund drop significantly over the last 16 months, while his increasing public appearances have been viewed as self-serving and mismanaged. He’s been vehement about supporting the likes of Cristina Fernández de Kirchner, considered one of the worst things to happen to Argentina’s unstable economy. General Motors’ knowledge of their faulty airbags and power steering prompted Bass to publicly state the blame for any fatalities should fall squarely on the victims who were either drunk or not wearing seat belts. He’s also conducted questionable investments that netted him millions while stunting pharmaceutical research and, in turn, hurting many people who would have benefited from that research.
The Patent Trial and Appeal Board is investigating the possibility of sanctioning the financier for short-selling those pharma stocks and questioning the validity of their patents, doing so via the Coalition for Affordable Drugs, an organization Bass set up.
Bass’ associations and actions seem designed to further an agenda of personal wealth with no regard to how it affects anyone. Many — especially Bass — would argue that’s the core of capitalism, but not even a figure as bombastic as Donald Trump would tell families their loved ones are dead because they weren’t wearing a seat belt, not because the auto manufacturer refused to release vehicles with functioning safety features.
Karma does seem to be in play. With his fund falling fast, the market is now watching the former wunderkind make one public and private mistake after another. The Patent Trial and Appeal Board has rejected two patent challenges Bass put before them and he’s still counting on the Argentine economy to rebound.
The market will continue to watch Bass, if only to see which wrong way he turns next.