Why GoDaddy Billionaire Bob Parsons Returned His $ 8 Million PPP Loan
Having received a stimulus check for his many businesses, including a golf equipment company and Harley-Davidson dealerships, the serial entrepreneur explains his sudden turnaround.
Anear home orders Led Bob Parsons to lay off 25 employees at his exclusive Scottsdale National Golf Club in March, the 69-year-old billionaire applied for a Paycheck Protection Program (P3) loan.
He was awarded $ 8 million to be divided among his 16 companies on April 13, 2020. But last week, the founder of domain name registrar and web hosting company GoDaddy changed his mind and returned the money to the federal government.
“There are a lot of other companies that needed it more than us, so we thought it was fair to give it back,” Parsons says. “It took a bit of soul searching – it was a good deal – but I was never above doing the right thing, and it was the right thing.”
Initially, Parsons had planned to cut its more than 900 employees “at all levels” by mid-March. By this time, the value of his investments in his private hedge fund, YAM Investments, had fallen by $ 700 million. He says he was able to give the 25 people he laid off six weeks of severance pay. Although the pandemic has affected nearly all of its diverse portfolio of businesses – including North America’s largest Harley-Davidson dealership and golf club maker Parsons Xtreme Golf (PXG) – Parsons says it has not had to fire or leave anyone since.
Was Parsons concerned about the backlash he would face as a billionaire asking for federal handouts? Maybe a little, he admits. But that was not the driving force to return the PPP money, he insists. “It looks like we have all this money, but we don’t,” he says. “If our stocks were doing really well, then we could still borrow against the hedge fund. But when it goes down like that, you don’t want to borrow because you might lose everything.
Bob Parsons knows what it’s like to have nothing. He grew up “poor as a church mouse” in downtown Baltimore and struggled in school, missing grade five. After nearly failing in grade 12 again, Parsons showed his teachers his orders to report to the Marines and they barely exceeded him. He was sent to Vietnam at the height of the war. He received four medals during his tour, including the Purple Heart and the combat action tape.
But it’s been a long time since Parsons wanted anything. After returning from Vietnam, Parsons enrolled in the University of Baltimore and after graduating with high honors he became a CPA and took a job with the credit company Commercial Credit owned by Control data. Control data. By 1984 he had started his own software company, Parsons Technology, and sold it a decade later to Intuit for $ 64 million.
In 1997, Parsons was looking for his next act and founded Jomax Technologies, a web design company. Within a few years he changed the name to GoDaddy and started selling domain names. Parsons sold the majority of GoDaddy, which became famous for its daring, often sexist, Super Bowl ads, to private investors in 2011. Forbesestimate, Parsons pocketed around $ 900 million in cash at the time; he sold the last of his shares in the now publicly traded company in 2018. Over the years, he has launched more than a dozen. other entrepreneurial projects. He has invested approximately $ 600 million in commercial real estate in Arizona. In addition to the golf club, it currently owns shopping malls, Harley dealerships, an advertising agency, a film production company, and PXG, among others.
Since the start of the shutdown, Parsons says its businesses have collectively lost $ 500 million in value. But he’s not too worried.
“This is where it is now, but as the country opens up I expect things to start moving because the economy has literally received a few trillion dollars,” Parsons said. , talking about the government’s $ 2 trillion stimulus package. “I have to believe that will help.”
In fact, Parsons claims his hedge fund has rebounded from March and has currently lost $ 400 million. To his surprise, many of his retail tenants were able to pay the rent. Now he is hiring 20 new employees at the Scottsdale National Golf Club. “I think maybe in June, July or August I’ll be back where I was, if not better,” he says. “Don’t feel sorry for me, I’ll be back. “
Meanwhile, Parsons says he’s doing whatever he can to protect his employees. Like many other businesses, it has allowed many of its employees to work from home. For those who can’t, he says he hired nurses to stand at the entrances to all of his main facilities to take the temperature of everyone who enters. He also converted Spooky Fast, his motorcycle manufacturing and customization business in Scottsdale, Ariz., To make hand sanitizer for his staff.
Parsons says he occasionally visits his Scottsdale office himself to help his reduced crew. “It’s not like the nuns in a Catholic dance school, where people put criteria between people,” he says. “It’s 6 feet [apart], and we wear masks. We have disinfectant everywhere.
One of its hardest hit companies is YAM Properties, its commercial real estate company. Tenants at its mixed-use properties in Arizona include Chase, Bed Bath & Beyond, and AMC Theaters. They were able to pay rent, but many others struggled to do so, he says.
“We are doing everything we can to try not to be heartless. We believe people matter, ”says Parsons. “We try to work with them as much as possible. [We ask], “What can you pay and when can you pay it?” As opposed to “We’re going to shut you down.” This is not what we do. It even helped boost the activity (and possibly morale) of its tenants by hosting movie nights behind the wheel in two of its shopping centers.
Parsons says he hired a company to install a giant screen in the mall’s parking lots. Participants pay $ 15 to $ 20 per car and can hear audio through an unused FM radio channel. He encourages customers to order food and drink from vendors in shopping malls. If they spend the price of their admission, Parsons says he returns the admission fee to the guests. At one of his malls, Sonora Village, Parsons says he’s sold 1,772 tickets in the past week and a half, earning $ 17,300 after credits, far less than what it cost him for. organize the event.
Another business affected by the coronavirus is Parsons’ charity, the Bob & Renee Parsons Foundation, which donates to education, healthcare and veterans, among other causes. Since 2012, Parsons and his wife have donated more than $ 180 million to charity. In 2013, they signed the Giving Pledge, promising to donate at least half of their fortune.
He says the foundation – which had $ 30 million in assets in 2018 – donates around $ 1 million to charities every two weeks, but this year it can be difficult to do. However, Parsons says he plans to honor the commitments he has already made.
Still a warrior, Parsons also doesn’t think the coronavirus is as deadly as it is claimed and suggests the death toll could be inflated. “Dying with COVID-19 from something else is very different from dying from COVID-19,” he says. “Numerous [deaths] have been registered as COVID-19. Now I believe that was not the cause of death. However, many experts, including the director of the National Institute of Allergy and Infectious Diseases, Dr Anthony Fauci, disagree.
He’s also happy with the way Arizona Gov. Doug Ducey, a Republican, has handled the pandemic. Ducey allowed cosmetologists and hair salons to open on Friday, May 8, 2020, and restaurants and cafes to open with physical distancing measures on Monday, May 11, 2020. “I think the whole country should be open,” he said Parsons said.
In the meantime, he looks forward to a return to normal life. He wants to spend time with his friends and have the freedom to go to a baseball game without having to wear personal protective equipment.
“Everyone wears a mask,” Parsons says. “It seems like every day is Halloween, with no goodies.”
Disclosure: Forbes Media LLC confirmed on July 6, 2020 that it received a Paycheck Protection Program loan of $ 5-10 million on April 15.