100 Entrepreneurs Who Changed The World
100. Michael Milken
“Any analysis of capital structure should recognize that most balance sheets are dramatically inaccurate because (with the exception of professional sports franchises) they fail to include the value of human capital.”
Michael Milken is an American financier and philanthropist who is noted for his role in developing high-yield bonds. Milken grasped what no one else had: that high-risk bonds without investment-grade ratings could be sold to investors at a premium. By calculating a value on these “junk bonds,” Milken enabled them to be traded. These bonds went on the finance hostile takeovers of poorly run companies. Companies were able to capitalize on the bonds as well, companies such as Time Warner, MCI, Safeway, Chrysler and many more were able to finance expansions they otherwise wouldn’t have been able to afford. When Milken’s company, Drexel Burnham, achieved market dominance, the sharks circled in. Milken was accused of violating SEC laws, which he plea bargained.
