Junk Bond Rogue to Philanthropist

The 1980’s was "make or break" time for many American business houses. Some established monoliths of corporate America vanished and some upstarts became the new kings. If this phenomenon had to be blamed on one man then it would be Michael Robert Milken. The Mike Milken story enfolded in America but it had captured the imagination of the entire world.

Mike Milken wasn’t like any other teenager in the San Fernando Valley, he would work longer hours than anyone else, at high school he was the prom Chairman, he made Phi Beta Kappa, he was the youngest student in his business management class, when he grew older he was singularly responsible for bringing invincible companies such as US Steel and Gillette to the brink of extinction.

Milken's position proceeded directly from his domination over junk bonds. Under his control they became the main source of finance for the expansion of mid-sized corporations. He had the uncanny ability to sell these junk bonds to financial institutions all over the world. He initially started working as a trader with Drexel but with his astounding success rate he was allowed almost a free hand by Drexel, where he ran his own personal fiefdom. One thing that grew almost as famous as Mike himself was his X-shaped desk in the center of the trading room at Drexel. At this point in time he was the highest paid individual in the United States of America.

He began financing billion dollar corporate raids on companies such as US Steel, Trans Works, Unical, Gulf, Gillette and Philips. His methods to finance these raids ranged from holding "stag parties" for brokers to bribing employees in organizations to part with critical data regarding the financials of the company. The companies along with Wall Street and the U.S. Government retaliated. Milken was convicted with an assortment of cases against him and a number of testimonies from former clients, associates and competitors. Milken was banned from securities trading for life and was given a prison sentence, which was later commuted. The Mike Milken years had transformed the US financial system forever.

It was in the midst of his seven year long trial that Mike Milken was diagnosed with prostrate cancer. He was given 12 to 18 months to live by the doctor. Rather than give up, Milken counterattacked. He learned everything about his disease and became a strict vegetarian, abandoning his diet of burgers and fries for steamed broccoli and soy shakes. He became a follower of the teaching methodology of the Yoga guru Deepak Chopra. The disease is now in complete remission.

Milken has already raised more than $75 million to fund cancer research projects. He has started his new venture called Knowledge Universe where he would attempt to marry education, entertainment and information to make education more accessible to kids. This project is an offshoot of his efforts to educate inner city kids.

The drive that he exhibited to become the king of junk bonds is still visible when he acquired dozens of companies, ranging from Leapfrog LLC, a maker of educational toys now with $80 million in revenue, to CRT Group PLC, a British information-technology training and recruiting company now with $700 million in revenues. Leapfrog LLC was given a big push by Milken when he roped in several of his celebrity friends to endorse its products. Its revenues grew from $17 million in 1997 to $80 million in 1999.

One thing however that hasn’t changed is the Milken credo: P = EFT (DHC+ESC+ERA). ''Prosperity is the sum of financial technology times the sum of human capital plus social capital plus real assets." This is something that Milken believes since his college days and still regularly mentions it at guest lectures. Another thing that remains unchanged is his 15-hour workday.