The dwindling fortune of a Brazilian magnate.
INVESTORS have lost their appetite for Brazil in recent months, as costs have risen and growth has stalled. Suddenly, profiting from the country's bountiful natural wealth and burgeoning middle class looks harder. For Brazil's best-known businessman, the shift in sentiment has been abrupt. In March Eike Batista (pictured) was seventh in Forbes's ranking of the world's super-rich, with a personal fortune of $30 billion. The firms he founded and listed, most in commodities and infrastructure, were valued at $44 billion.
The most recent rich list reckons that Mr Batista is now down to his last $14.5 billion-46th globally. His listed firms are worth a mere $18 billion. Mr Batista listed some of his companies when they were not much more than an idea. With buckets of bravado, he persuaded investors that his firms had boundless potential, and that he was the man to unlock it.
Then came the crunch. In June OGX, his oil firm, slashed output targets for two offshore wells from 20,000 barrels a day each to about 5,000. That knocked 7 billion reais ($3.4 billion) off its shares in a day, and spread panic across the group.
OGX's wells made up a large part of the revenues of EBX, the holding company for Mr Batista's stakes in his listed firms. The main asset of LLX, another part of EBX, is the port of A?u. This is nicely placed for shipping iron ore from the inland state of Minas Gerais to China and for handling rigs and ships working Brazil's vast oilfields-but it is still being built. MMX digs plenty of iron ore out of the ground-but not at a profit.
The links between EBX's various parts compounded Mr Batista's woes. He planned to make money from Brazil's mineral wealth at every stage in the supply chain. One of his ventures generated electricity from coal and gas supplied by another; a third shipped the oil and iron ore owned by a fourth and fifth, and so on. But OGX underpinned the lot.
One part of Mr Batista's empire, OSX, has ridden out the bearish mood. It looks likely to do lots of business with Petrobras, Brazil's state-controlled oil giant, building and maintaining ships and rigs. Petrobras has been out of favour with investors since 2010, when the government diluted minority shareholders in an oil-for-shares deal. But Gra?a Foster, its boss, seems willing to stand up to the government, arguing publicly for a rise in the (government-controlled) price of petrol. And the government is no longer so hostile to private firms building infrastructure (see article). So those keen to buy into commodities and infrastructure may soon have more options-which will hardly help the EBX companies' share prices recover.
Mr Batista claims not to be worried. "Since I haven't sold a single share, I've lost nothing," he tweeted. Investors are probably less sanguine, though many old Brazil hands, used to rocky rides, are waiting out the worst. The Ontario Teachers' Pension Plan, a Canadian pension fund that is LLX's largest investor after Mr Batista himself, seems serene. It wants to join Mr Batista in his plans to take the firm private again.
Presumably Mr Batista thinks that LLX is now undervalued-and that a show of self-confidence would not be misplaced. "If the markets don't want me, I still want me," he recently told Exame, a Brazilian business magazine. Like other great salesmen, Mr Batista sold not the sausage, but the sizzle. Now investors are balking at the idea of a long wait before mouth-watering returns materialise.