Although Kevin O’Leary undoubtedly enjoys the spotlight, there are things the businessman and professional pot-stirrer would probably prefer to keep quiet. This morning, Report on Business published a lengthy investigative profile by Bruce Livesey and Tim Kiladze that skewers his carefully wrought image as a savvy and successful business leader. Below, the five juiciest tidbits about the media personality, including the inside scoop on a failed Dragons’ Den deal, and why some investment advisors are wary of O’Leary’s investment fund.
1. The business deals that made him rich were controversial
The official story about O’Leary’s rise to prominence is that he built a hugely successful educational software company called SoftKey (later renamed TLC), which he sold to Mattel for just under $4 billion in 1999. However, the ROB feature lays out a counter-narrative, presenting evidence that TLC overstated its earnings through accounting gymnastics, and noting that it lost money for the three consecutive years leading up to the Mattel deal. Moreover, the takeover was disastrous for Mattel, which ended up selling TLC in 2000 for $27.3 million—Businessweek called Mattel’s purchase one of the “worst deals of all time.”
2. He’s not a billionaire
Though he is definitely very wealthy (and likes nice things, too), O’Leary is sometimes mislabelled a billionaire because of the $4-billion purchase price in the Mattel deal (most of that money actually went to a group of investment firms that had taken an ownership stake in TLC in 1997). O’Leary earned only $11.2 million from his dealings with Mattel: nearly $6 million from selling his portion of Mattel stock, and $5.25 million from a severance package after he was fired six months into his new post as president of Mattel’s TLC digital division.
3. He really is as fearless as he seems
For proof of O’Leary’s brashness, look no further than how he got his start in television. In 2003, Jack Fleischmann, the general manager of Business News Network, received a call from some guy named Kevin O’Leary who wanted to be on television. Despite the fact that it was a cold call, Fleischmann agreed to an audition and was hugely impressed by O’Leary’s sharp delivery. “He absolutely, totally, from the moment he opened his mouth, lit that camera up,” Fleischmann told ROB’s reporters.
4. Those Dragons’ Den deals don’t always work out
Apparently, a minority of the deals made on-air during Dragons’ Den actually close. Kiladze and Livesey track the story of Neil Currie, who went on the show with his business partner in 2009 and made a deal with O’Leary for a cash infusion in exchange for 50 per cent of their online company. Afterward, when the entrepreneurs couldn’t get O’Leary on the phone, they decided to build their business without him. A year later, CBC called to see if they’d still make a deal with O’Leary, but they were already making money and no longer needed him. According to Curry, O’Leary lost out on nearly $500,000 in 2011 alone.
5. Some prominent advisors are increasingly wary of O’Leary Funds
O’Leary launched an asset management company (named after himself, natch) in October 2008. By 2010, he had raised more than $1 billion and bragged that he expected to quintuple that within three years. However, ROB reports that investors have begun to pull their money from its funds; the magazine also says prominent investment advisors are worried that the funds’ promised yields are unsustainable and that some of their holdings are highly speculative. Some of those advisors have even called O’Leary to voice their concerns, including one who told the Dragon, “You’re supposed to be the smartest businessman in the world. How’d you end up in this situation?”