A Wild Ride At NASCAR
Alex Meshkin's story was so good it almost glowed. A precocious kid races through high school, graduating in three years. With his parents' blessing, he passes up college to become a day trader, quickly converting a tuition fund into a fortune. More money is made with a dot-com started up and sold in the boom years. Then on to NASCAR, where at 23, the boy wonder becomes the youngest team owner in major-league sports.
Meshkin has been telling versions of his Horatio Alger tale for years, and the media have been all ears. Profiles have appeared everywhere from Wired to The Washington Post. Last June the Fox Sports (FOX ) show Totally NASCAR called Meshkin the sport's "whiz kid."
It all sounds so sensational, so motivational. And it would be -- if only the Meshkin story hung together.
But Meshkin, now 24, didn't graduate from a Maryland high school in three years, his day trading profits can't be confirmed, and he won't reveal the name of the outfit that he says "merged" with a Web site he co-founded in a deal worth $24 million.
Now, Meshkin's racing business has a big hole in it, too. Besieged by angry investors and stung by sponsor defections, Meshkin's once-promising Bang! Racing is reeling. On Jan. 21 the team shuttered its 35,000-square-foot shop in Mooresville, N.C. In the garages in and around Charlotte, a hub of NASCAR racing, speculation is thick that the upstart team may not race in 2005 -- if ever.
In a 4 1/2-hour on-the-record interview at a burger joint in Mooresville on Jan. 17, Meshkin told two BusinessWeek reporters that the string of publications that had written about him got his story wrong. He said his biggest mistake at Bang had been trusting in his team of NASCAR veterans.
That begs a number of questions: For starters, how did a whippersnapper with zero experience running a motor racing team elbow his way into NASCAR? How did he persuade Toyota (TM ) in just its first year of NASCAR racing to pick his bid for one of four sponsorships out of the 84 submitted? Did NASCAR conduct any due diligence on Bang Racing?
Just a year ago, NASCAR insiders were hailing Bang as a team to watch and Meshkin, its irrepressible owner, as a farsighted entrepreneur. His dream of melding the speed of NASCAR with cutting-edge technology impressed racing insiders and sponsors. It was only a matter of time, it seemed, before fans would be engaged in live chats with their favorite drivers at Nutzz.com, a Bang Web site. Or they would be reaching for their cell phones at the track for audio feeds from inside race cars. Both were among Meshkin's innovative ideas.
Those favorable first impressions have faded. Now, Meshkin finds himself at odds with many in the tight-knit racing community. His backers and fellow executives at Bang, who just months ago had soaring expectations for Meshkin, are his sharpest critics. In fact, as of Jan. 26, a former Bang executive, attorney James L. Coffin, already had hauled Meshkin into federal court, suing him for alleged misuse of Coffin's credit reputation and for failing to live up to promises of a six-figure salary and equity in Bang. Other refugees from the race team are also threatening legal action. One is investor George Blacker, who says he put together $400,000 in financing for Bang. Blacker claims that once Meshkin had the money in hand, he reneged on a job offer and the size of a stake in parent company Bang Holdings. Meshkin says Coffin waited nine months after being let go before starting to allege that Meshkin is "the anti-Christ." He says Blacker misconstrued the terms of their arrangement.
Fox Sports analyst Larry McReynolds, a former equity partner in Bang, just wishes he had never crossed paths with Alex. "Every morning I wake up hoping [Meshkin] goes back to where he came from," says McReynolds.
McReynolds, who was crew chief for the late Dale Earnhardt, is one of the most recognized names in NASCAR. That he agreed to team up with Meshkin, a racing neophyte, says something about Meshkin's gift for salesmanship. And McReynolds wasn't the only one to discover that Meshkin could talk the chrome off a hubcap. Just ask others who believed that in helping to start Bang, they were hooking up with a charismatic kid carrying a fat checkbook.
But the facts about Meshkin's personal wealth are fuzzy at best. Meshkin declines to provide any details about his current worth. While still in high school in the late 1990s, he told BusinessWeek, he used his college fund (with permission from his parents) to become a wildly successful day trader. He said he cashed out of his day trading career with more than $2 million.
That was far from the last score, according to Meshkin. Even as the dot-com bust was beginning, he says he and his older brother, Brian -- from whom he is now estranged -- sold Surfbuzz.com, a Web site they had started, for $24 million in cash and stock. Meshkin refuses to identify the buyer or explain clearly why he won't share that information.
Still, Meshkin's track record in business -- or at least his appearance of wealth -- was enough to convince experienced sports execs that the aggressive would-be team owner was the real deal. "Everybody just assumed he was a very rich guy. I heard estimates of $80 million to $90 million," says Coffin, a former sports agent who says Meshkin hired him in September, 2003.
Meshkin's pitch also hit home with McReynolds, and he officially joined Bang as a partner in the fall of 2003. With McReynolds carrying the flag, Bang landed Toyota as lead sponsor of its Craftsman Truck Series team. Top drivers Travis Kvapil and Mike Skinner also joined Bang, as did an experienced crew chief, Rick Ren.
As the 2004 racing season progressed, Bang was living up to Meshkin's high expectations and racking up a strong record. But inside Bang, there was turmoil. To many at Bang, the team seemed chronically underfinanced. Meshkin doesn't dispute that money was tight, but he blames the spendthrift ways of McReynolds and others. "I thought the individuals advising me -- Larry and a few others -- would have an understanding of what things cost. They didn't," Meshkin says. To close the cash gap, Meshkin insists he put up his own money: "a couple of hundred thousand" in 2003 and more in 2004.
Coffin and other Bang execs complain that Meshkin fell behind on payments to them. Crew chief Rick Ren says McReynolds was fielding phone calls from unpaid and irate suppliers. In his interview with BusinessWeek, Meshkin insisted that Bang paid its bills within 45 to 60 days, the norm in many industries. But Ren says that late payments became a sore point between Meshkin and McReynolds and spawned suspicions about whether Meshkin was a true tycoon. "These [suppliers] had all read the articles about how much money Alex had. And they wondered: 'If he has that much, how come he can't pay in a timely manner?"' says Ren.
In July, McReynolds announced he was leaving Bang. His departure was followed by another jarring blow. Toyota, which contributed 10 of Bang's 12 trucks and pumped $6 million to $8 million into the race team, according to a source inside the team, announced in August it was pulling its support -- a highly unusual move so far into the season. "Our agreement specified that Alex and Larry McReynolds were going into this as partners. That was one of the key ingredients in our wanting to put together a contract with Bang Racing," says Les Unger, national motor sports manager for Toyota Motor Sales USA, of the decision to withdraw. Toyota was eventually nudged back to Bang by NASCAR CEO Brian France, according to sources close to Bang. A NASCAR spokesman, while not confirming that, acknowledged that France "was apprised of the situation." At the end of 2004, however, Toyota and Bang parted ways.
NASCAR declined to comment on any troubles at Bang. "If a team shows up at the track with a licensed driver and a race car that passes inspection, they can race," the NASCAR spokesman said. "The bottom line is we don't get involved in what happens within teams or race shops."
On Jan. 17, Meshkin was upbeat about the coming NASCAR season. His plan was to move up the NASCAR ladder to the Busch Series races with Kvapil driving Dodge cars. But on the morning of Jan. 21, according to a knowledgeable source, Meshkin gathered the remaining handful of Bang employees at a local Cracker Barrel restaurant and announced that he was shutting down the team.
Publicly, though, Alex is still the optimist. In a Jan. 26 e-mail to BusinessWeek from his BlackBerry, Meshkin wrote: "Bang will run in '05 we are restructuring which I can't explain yet do to [sic] business reasons. If you can give me until next week we can speak."
By Mark Hyman in Mooresville, N.C., and Jordan Burke, with Mike France in Mooresville and John Cady in New York