4 Shocking Celebrity Investments

by Adam Benjamin | October 7, 2013 1:01 pm

4 Shocking Celebrity Investments

Dr Dre 185 4 Shocking Celebrity Investments[1]Celebrities have a reputation for disastrous financial decisions. Whether it’s blowing cash on mansions, drugs or ex-spouses, the rich and famous just have a way of burning through money.

But then there are the rare celebrities who prove to be savvy businesspeople. Some of them aren’t surprising — anyone who started as a producer in the music industry is expected to have a decent degree of business acumen. Just look at Dr. Dre, the rapper/producer who carved out a solid space in the consumer electronics segment with his Beats brand of headphones.

The Wall Street Journal recently reported that private equity firm Carlyle Group LP is planning to invest half a billion dollars[2] in Beats Electronics LLC. The site suggests the electronics company is worth more than $1 billion, which means the good doctor is probably sitting on a sizeable amount of cash from the investment.

But what about the unexpected investors? The ones we expect to see in gossip magazines, not Forbes? Here’s a look at four of the more surprising celebrity businesspeople.

50 Cent

50 Cent 185 4 Shocking Celebrity Investments[3]At some point in his career, Curtis Jackson decided that investing in promising businesses was more appealing than getting shot. That much isn’t surprising.

What is surprising is how well he did in the business world. In exchange for letting the company use his name alongside one of its Vitamin Water products, the rapper received a 10% stake in Glaceau. That proved to be a great investment in 2007, when Coca-Cola (KO[4]) bought out the company.

50 Cent’s profit on the investment was $100 million[5], according to Forbes. Not a bad return for the man responsible for the song “Candy Shop.”

Justin Timberlake

Justin Timberlake 185 4 Shocking Celebrity Investments[6]In The Social Network, Justin Timberlake’s character played an important role in launching Facebook (FB[7]) into the stratosphere. As it turns out, the star is a pretty good investor in real life, too.

JT was part of a $35 million deal that sold MySpace to an advertisement company. We’ll have to wait to find out whether it was a good investment, but Forbes suggests that Timberlake had a major part in the deal[8], so he could stand to make big profits if the website goes anywhere.

Meanwhile, the former boy band member has been making a slew of other investments, including startups and clothing lines, not to mention that golf course[9] he bought.

It’s easy to be skeptical about MySpace, because… well, it’s MySpace. But Justin already brought sexy back, so maybe he can do the same with MySpace.

Lady Gaga

Lady Gaga 185 4 Shocking Celebrity Investments[10]Lady Gaga might be the reigning queen of pop, but how do her investments stack up?

She and her manager are the forces behind Backplane, a startup that promotes brand-to-fan engagement. The company’s first project was the Lady Gaga fansite LittleMonsters.com, which continues to gain support from a variety of investors, including Sequoia Capital, Battery Ventures and others. Now, the platform is attracting brands like Coca-Cola, and recently gained another $12 million[11] in funding.

Lady Gaga also teamed up with Zynga (ZNGA[12]) in 2011 to introduce the world to GagaVille[13], an online social game based on Zynga hit FarmVille. The game was used to promote the singer’s upcoming album, Born this Way.

Let’s just hope she didn’t invest any of the profits into Zynga’s IPO … otherwise, she could be sitting on a 60% loss.

Will Ferrell

Will Ferrell 185 4 Shocking Celebrity Investments[14]Will Ferrell, of Saturday Night Live and Anchorman fame, is known for his tendency to be very loud and very naked.

What he isn’t known for — at least not by many — is savvy business investments. But Ferrell was actually one of the minds behind comedy site Funny or Die, which has proved to be a successful investment. Back in 2008, HBO took an undisclosed stake[15] in the site, and turned the site’s sketches into a comedy show.

Sure, the deal might not have been as lucrative as some of the others on the list, but you probably weren’t expecting everyone’s favorite oversized elf to make an appearance.

Stay classy, San Diego.

Adam Benjamin is an Assistant Editor of InvestorPlace. As of this writing, he did not hold a position in any of the aforementioned securities, nor did he have a Zynga game based on him.

Endnotes:
  1. [Image]: http://www.flickr.com/photos/34495711@N06/5144961594/
  2. half a billion dollars: http://online.wsj.com/article/SB10001424052702304526204579100711774280296.html
  3. [Image]: http://www.flickr.com/photos/mikezzzz/6230795690/
  4. KO: http://studio-5.financialcontent.com/investplace/quote?Symbol=KO
  5. $100 million: http://www.forbes.com/sites/zackomalleygreenburg/2013/03/27/50-cents-next-beverage-bonanza/
  6. [Image]: http://investorplace.com/wp-content/uploads/2013/10/Justin-Timberlake-185.jpg
  7. FB: http://studio-5.financialcontent.com/investplace/quote?Symbol=FB
  8. a major part in the deal: http://www.forbes.com/sites/investopedia/2011/10/05/top-celebrity-investors-and-what-theyre-invested-in/
  9. golf course: http://www.golf.com/tour-and-news/justin-timberlake-doesnt-just-love-golf-he-lives-it
  10. [Image]: http://investorplace.com/wp-content/uploads/2013/10/Lady-Gaga-185.jpg
  11. gained another $12 million: http://venturebeat.com/2013/08/21/backed-by-lady-gaga-coca-cola-backplane-helps-big-brands-build-communities/
  12. ZNGA: http://studio-5.financialcontent.com/investplace/quote?Symbol=ZNGA
  13. introduce the world to GagaVille: http://mashable.com/2011/05/10/zynga-gaga-gagaville/
  14. [Image]: http://www.flickr.com/photos/evarinaldiphotography/7716007696/
  15. took an undisclosed stake: http://blogs.wsj.com/speakeasy/2010/02/19/funny-or-die-presents-debuts-on-hbo-with-drunk-history-with-will-ferrell-and-don-cheadle/

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