Update: When we wrote this piece it was done so in real time. Grant Cardone released this video and it came up on our feed. We had no way of knowing Grant Cardone was outright lying about going bankrupt as a way to get media attention for himself in the early phase of the pandemic when deaths were skyrocketing and public attention was focused on the enormous consequences of a global pandemic. Had Cardone been the CEO of a publicly-held company he would have been terminated immediately and possibly sued by shareholders.
Grant Cardone admits to bankruptcy in this very short and bizarre video. Scientology Founder L. Ron Hubbard wrote about “the glee of insanity” and Cardone certainly fits the description in this video. Grant Cardone posted this video on Instagram and then took it down. Why does a CEO with 3200 investors to whom he has suspended distributions and bankers to whom he owes one billion in debt post this type of video online in which he jokes about going to prison? Has Grant Cardone, in fact, received a Wells Letter from the SEC?
We are verifying details of this video clip. Where and when was it made? It is very recent, perhaps today. Grant Cardone makes a comment about his his strange new haircut. In a video he just did with his wife Elena, Grant Cardone says he may have had the Coronavirus. He also cites stress as a factor for the strange appearance of his hair. In this video, Elena speaks of “being on the other side of this.” The Cardone’s seem to be cryptically alluding to trouble.
In our opinion, Grant Cardone has been erratic for at least 45 days and has exhibited bizarre mood swings ranging from mania to seriousness to freakishness. Some have even called us to say this video is Grant Cardone trolling in this video. If so, he has just destroyed his credibility at a profound level. Who would invest with such a reckless and irresponsible fool in the future? What banks would loan money to this deranged person? CEO’s do not behave in self-destructive ways that destroy their reputations and that of their organizations and companies.
The reaction to Cardone’s announcement of bankruptcy is beginning to be posted online and we are watching it.
Our recent article discussed Grant Cardone’s strange and erratic “Quarantined in Clearwater” videos. We reported on Grant Cardone’s statement in these videos that Cardone Capital is based upon 10 year loans, five of which are interest only. We showed how this model becomes untenable at month 61 when his claimed one billion in debt balloons from $3.125 million per month to $18.3 per month for principal and interest. Cardone Capital becomes insolvent at this point based on owning only 7722 units. We estimated Cardone Capital is at least $11 million short of pay his principal and interest.
An excerpt from our previous article:
2. Grant Cardone’s published loan figures show an average 3.75% interest rate. Here is how a one billion dollar ten-year loan is repaid where the first five years are interest only:
A. Loan amount: $1,000,000,000 @ 3.75%.
B. Annual interest: $37,500,000.
C. Annual interest divided by twelve months: $3,125,000 per month in “interest only” payments.
D. At the end of 60 months (five years) of interest only payments, Cardone’s one billion dollars in loans balloon massively. The monthly payment skyrockets from:
* $3.125 million interest only, to:
* $18.3 million per month in principal and interest.
Below is a ten-year loan schedule for one billion dollars @ 3.75% with the first five being interest. We used the Calculate Stuff website to create the schedule. The loan assumes January 2020 – December 2030:
Categories: The Scientology Money Project
Like so many Grant videos this one is a bit confusing on the details that really matter. It appears that Grant is describing not just a mere bankruptcy–essentially a re-negotiation of one’s debt repayment with one’s creditors–but a massive foreclosure. Or, more likely, a sweeping deeding of assets back to the bank “in lieu of” foreclosure since there clearly hasn’t been time (or the availability of courts) for the banks to foreclose yet. An actual foreclosure takes many months and only occurs after the bank has exhausted a number of steps of attempted debt collection as well as jumped through a slew of legal hoops. In fact, a bankruptcy would only throw grist in the mills and further delay what Grant describes, namely a foreclosure and the return of assets to the lender.
But no need to feel sorry for Grant just yet. If some form of foreclosure or an in lieu turns out to be the case what will happen is a wiping out of equity (or what little there is with an 85% loan to value). And most of that equity belongs to his investors. In fact, where equity remains he may even be entitled to his 35% as in effect a sale–albeit an enormously unfavorable one–would be taking place.
Regardless, he’s already collected his management fees, By his own admission, he just paid himself $800k last month while his investors largely missed out on their dividend. To say nothing of his laid off employees who received no severance and were given a cheerful “sue me” on their way out the door. Grant is a mere “managing partner.” He’s not liable for the asset itself and can claim “I only work here.Sue my boss, the corporation, for all I care” The investors will be largely powerless over whatever comes next as they committed to a “passive” role in Grant’s scheme.
What should give anyone pause is Grant’s messaging. Here is “the world’s #1 sales expert” releasing hostage-type video snippets that more than hint at a complete lack of direction. A mere few days ago, he spoke of how his money is safe–he must have been speaking of his personal funds NOT the assets he’s managing–or how he will not sell the jet or reduce the number of properties. In fact, he was welcoming new investors to join him and promised his former employees that he will rehire them first chance he’ll get. Now THIS?
This does not sound like someone with a sufficient grasp on what his corporate books look like or a plan on how to navigate this crisis. It sounds like the only downside protection he’s offering his investors and those he is “mentoring” is “gee, I am just as surprised and confused as you are.”
Well said B.T.C.
I watched the longer video thinking that maybe in the first one he was taken out of context. I wanted to be sure that my previous assessment had been fair to the guy. After all, the first video is plenty crazy…
It turns out the second one is crazier still.I don’t believe I have seen anything like this since the days when a drug-addled Charlie Sheen lost his $2 m per episode “Two and a Half Men” gig that had made him the highest paid TV actor, and he reacted by releasing a series of stream-of-demented consciousness videos going on about how he was “winning” and that “tiger blood” coursed through his veins. (The runner up would be Marty Rathbun’s video series proclaiming that he was the last man who couldn’t be bought–right after he had been bought off by the cult, in a series bought and paid for by the cult).
The only difference being that Charlie is an entertainer with a long established Hollywood tradition: the license to act crazy to the delight of his fans. This license does decidedly NOT apply to the CEO of a $1.5 bn investment scheme where all of that money belongs to others. Temporary insanity is NOT a defense in a bankruptcy case that you well escalate to a fraud one.
Investors and banks WILL realize that he is cackling at THEIR expense! But if nothing else, they should save these videos. They will play rather nicely in front of a jury some day!
Jeffrey, Wow that was fast. From your prediction that last few days to now. Wow.
Link to the longer video clip BTC?
Stressed and overwhelmed. The haircut, sagged eyes and fickle laughs are all further signs.
With a !0 cents on the dollar deal it’s Just under $200,000 per unit @$1.5 Billion value, but it’s $130,000 per unit based on just buying out the $1 billion mortgages. @ 10 cents on the dollar it would be a great deal, provided they aren’t all in a blighted low income area. But banks don’t do that anymore. They’ll sit on it for a while.
“And if you know a good bankruptcy lawyer who could protect me from going to prison….”
Why, Crant Cardone, ask David Miscavige to whom you gave millions for his lawyers to protect him from the lawsuits of those he has abused and which he has available to use for his armada of lawyers and PIs to harass them and if possible “to ruin them utterly” (as per Scientology policy) and for his grandiose lifestyle.
https://tonyortega.org/wp-content/uploads/2016/01/IASTrophy16f-e1453501360298.jpg
And look who else has made the Patron Laureate club! Grant and Elena Cardone have really come on strong in the last couple of years, doing Super Power and hobnobbing with the Duggans. And they’ve had to send a lot of money Miscavige’s way in order to come up to $10 million this year. – https://tonyortega.org/2016/01/23/whale-watching-2016-edition-whos-keeping-scientology-afloat/
As wildly inappropriate as it is, I’m pretty sure he is just kidding around..
You guys fell for that? 😆
https://m.youtube.com/watch?v=85ZA5clk3Lg&feature=youtu.be
Grant Cardone is the CEO of Cardone Capital. People tend to take statements of a CEO at face value as they have fiduciary responsibility to their shareholders and are bound by SEC rules. However, after Grant lied about going bankrupt, no one will ever believe anything he says again. Grant Cardone is a bullshit artist and a fraud he proved it his with his fake video.
We predict Grant will eat crow when he files for bankruptcy protection as early as 3rd or 4th quarter 2020. We say this because Grant is on such a razor-thin edge that he had to suspend a mere $1.2 million in distributions a month for three months. $1,200 is rent on 1,000 of Cardone’s 7,000 apartments. That is how much he has to set aside for distributions each month and now he can’t do it.
$1.2 million a month should be chump change to Mr. 10X. But no. Grant is terrified over what amounts to $300,000 a week in distributions. Work the numbers and that’s only $42,857 a day. Grant can’t come up with a measly $42,857 a day for his investors? Sounds like he doesn’t have the sales or cashflow he claims.
Grant is weak. The fool will be drowned by his debt. Debt it is a millstone around his neck and he is standing on a crumbling cliff overlooking the abyss.
As for falling for stupid things, Grant Cardone’s investors are the real victims. It is tragic and he screwed with them in his fake video. More will be revealed about Grant Cardone as his empire collapses from within.