What's up guys and welcome back to wall street millennial today we're doing a video about bjorn golfer gomenson, jordan golfer was once iceland's richest man with a net worth of 1.1 billion dollars, but in the span of less than one year his net worth declined to zero. In this video we'll go over how bjorn golfer built his business empire and how it all came crumbling down in 1941, bjorn golfer was born in the icelandic capital city of reykjavik. Iceland is a small island nation sitting in between scandinavia and greenland, with a population of 350, 000 is roughly the size of st louis. He pursued a successful business career and in 1977 became a director at the shipping company half skip at the time.

The iceland shipping industry was controlled by duopoly, consisting of half skip and rival shipping company imskip. Initially, the two companies could coexist peacefully, as there was ample demand, shipping goods between europe and the united states, but this all changed in the 1980s. When american shipping companies entered into the icelandic trade routes with increasing competition, there was only enough room for one icelandic shipping company to survive, unable to pay back its debt. Half skips bank declared them to be in technical default.

To add insult to injury, half skip's rival imskip bought half skipped ships from the bankruptcy auction at a fraction of their original value after the bankruptcy bjorn golfer was also prosecuted for accounting irregularities at half-skip. During his directorship, he received a 12-month prison sentence suspended for two years. He avoided serving any time in jail because he did not commit any crime. During the two-year suspension period, bjorn golfer viewed halfskip's default in his own legal prosecution as unfair and orchestrated by his business and political rivals.

He was an outspoken supporter of the icelandic independence party. While the prosecution was aligned with the rival progressive party. They say that success is the best revenge after this disgrace. Bjorn golfer made it his mission to surpass his former rivals at imskip by becoming the richest and most successful businessman.

Iceland had ever seen with his reputation in the icelandic business community greatly impaired, bjorn golfer moved to russia to make back his fortune in the early 1990s. He lined up financing to purchase some old bottling machines from a company in saint petersburg and started a bottling company called the baltic bottling plant. He ran the business in conjunction with his son, bjorn golfer, thor bjorngolfson, and it ended up being a huge success and they sold it to pepsi for a huge profit. They also started a brewery which produced a premium boccaref beer, which was wildly successful in russia.

In 2002, they sold the brewery to heineken for 400 million dollars with hundreds of millions of dollars in his pocket. Bjorn golfer returned to iceland with the goal of becoming the country's first ever billionaire. In 2002, he and his son used their money to purchase a 45 controlling interest in lansbanken. Iceland's second largest bank bjorn golfer named himself as chairman of the bank and started an aggressive growth strategy.

They had 40 branches across the island, which sounds small by international standards. But given how small iceland was landsbanking was the second biggest player in the industry. Providing 40 of all corporate lending, but this was not enough for bjorn golfer, with the domestic banking industry already saturated, he turned his attention to international expansion throughout the 2000s. Landsbanking went on an acquisition spree of european investment banks and institutional brokerage companies.

They consolidated these international operations into landspanky securities, which became a massive player in the european securities market. By 2007. They were the second largest institutional broker to companies listed on the london stock exchange as measured by number of clients. The expansion caused landsbankin's revenues profits and share price to increase, giving it a market cap of more than three billion dollars at the peak.

His son, yorn golfer thor bjorn golfson also owned a sizable stake in the bank. The success of land's banking gave bjorngolfer a net worth of 1.1 billion dollars. This was a huge deal as he and his son were the first ever billionaires in iceland's history. In 2006 and 2007 lands banking launched an online savings, account product called ice, save in the united kingdom and the netherlands.

They lured customers with high interest rates of five to six percent. By 2008, they had 300 000 uk customers with 5 billion euros deposited and 125 000 dutch customers, with 1.7 billion euros deposited. They used these deposits to invest in fixed income assets that were supposedly safe, landsmaking was highly leveraged and significant portion of their assets were exposed to the real estate industry. When the bubble burst in 2008, the value of their assets decreased, pushing them into insolvency.

At the time, the country's economy, and especially its stock market, were dominated by banks, which all had significant exposure to the real estate crash by mid-2008. It became clear that the icelandic banks were close to insolvency and their share prices went into free fall. The iceland stock index fell by 95 from its 2007 peak, as foreign investors were selling their icelandic stock holdings, they were also dumping their icelandic kronos, to convert them into other currencies. This caused the corona to depreciate in value by 35 percent against the us dollar.

This was a big problem for landsbankin. The deposits for icesave were denominated in pounds and euros with the bank's domestic assets depreciating and their foreign assets tanky in value because of the real estate meltdown. They had no way to pay the hundreds of thousands of ice paint customers in october 2008 ice safe, suspended new deposits or withdrawals from their accounts, because they simply didn't have enough money from the frozen steps of iceland to the streets of london. This is a cautionary tale of global banking.

Once upon a time in iceland's newly deregulated banking sector, the country's second largest bank landsbanky wanted to attract international customers, so it set up a london-based online account service called icesave. It seemed like a great deal offering rates as high as 7 percent. More than 300 000 british depositors jumped in with 7 billion dollars in funds. Now, as noted on icesave's website, deposits of up to sixty one thousand dollars were guaranteed, but with a catch the first twenty eight thousand were guaranteed by the icelandic government.

The remainder would be compensated by the british when the credit crisis hit. Iceland's economy started to crumble. Russia and sweden pumped in billions to keep the country afloat. The currency plummeted so fast, iceland was forced to freeze trading and landsbanky taken over by the government.

British depositors rushing to withdraw from isave were greeted by this chilling note on the website and with iceland on the verge of bankruptcy. Any guarantees were now in doubt the uk and netherlands. Governments ended up paying ice, saves customers for their deposits, costing them about 7 billion euros. After this, there is a multi-year legal dispute between the icelandic uk and netherlands governments over repayment of the losses.

As for landsbankin, it was nationalized by the icelandic financial supervisory authority. The government provided the liquidity for its branches to still operate and make good on its domestic liabilities as part of the government takeover dorm golfer was removed as chairman. As a result of the nationalization. All existing shareholders in the bank lost their entire stake.

This was very bad for bjorn golfer, as he had more than 100 of his net worth in landsbank and shares. He had borrowed money against a stake in the bank when this became worth nothing. He was stuck with 750 million dollars worth of debt and forced to file for personal bankruptcy. In the 2000s he purchased the british soccer team, west ham united as a vanity project as part of the bankruptcy settlement.

He had to turn over the team to his creditors. Jordan, golfer's son, born golfer thor jorngolfson was also taken to the brink of bankruptcy by lance bacon's disaster. However, he was able to strike a deal with his creditors whereby he would maintain control of many of his assets and pay back his debts over a longer period of time. He also maintains his role as chairman of novator, a london-based private equity fund, which he founded he's made a remarkable comeback.

Having been able to repay most of his debts, he returned to billionaire status and is currently the only icelandic billionaire alive. Today he and his private equity firm have made successful investments in online cycling, company, zwift, food delivery, company deliveroo online payments, company stripe as well as cryptocurrencies, alright guys that wraps it up for this video. What do you think about bjorn golfer's epic fall from grace? Let us know in the comments section below, if you enjoyed this content, make sure to hit the like button and subscribe. So you don't miss future uploads as always.

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