Ten years ago today
nycat
Jerry was, as urban legend would have it, a player in the IPO that
sultry August day of the hottest IPO of the summer, Netscape. His
broker at Morgan Stanley is rumored to have told him both the opening
trade of Netscape's IPO and the price JG's order was filled at that
morning. Jerry clutched his chest and winced a reply: "Netscape
Opened at What?"
Netscape was scheduled to open at $28, it didn't - - - it opened
instead at $71! The Investment banker VIP client's were all filled
at $28 and the general public was filled between $68 and $75 where the
IB's preferred client's and employees were allegedly selling for a
quick profit.
This was a benchmark IPO in more ways than one. In the ensuing months
NASDAQ's precipitous drop was unmatched in it's ferocity since four
brokers at The Equitable Building jumped to their deaths in 1929.
This was the beginning of the end of an era we now call
"The Bubble."
Tech stocks at that time were priced on anticipated earnings. Most
observers were nonplussed to find tech giants trading at valuations
greater than GM and IBM. Today the promises made during those GO-GO
days has been kept with stocks like GOOG and eBay which is now a member
of the S&P500 delivering earnings like the Golden Eggs of ancient
fables.
Frank Quaottrone is credited with being the key player in bringing
Cisco, Amazon, RazorFish and Netscape public during those eternal
sunshine days when NASDAQ tech IPO's typically were priced at $15 and
would open above 27. In 2000 Mr. Q earned over 120 million and one year
later CSFB agreed to pay $100 million to settle allegations of abuses
in how it allocated shares of IPOs. If you were in the inner circle
(read minimum buy of $5Million) and were allocated shares at $28 you
had an instant profit at the open, which peaked within a few minutes at
$75 and settled the same day at $58. The late Mr. Gracia, like
thousands of others, was down and out from the word go.
Come visit us today and you will see our Dancing Bear Flag at
half-mast. My buds at http://geekt.org/ have the quote as: "What did
Netscape close at?" and have a T-shirt to memorialize their version
of this Urban Legend. I also sent this to:925m.com and youmay want to
peep and post new media ideas there that you wish to share. Peace
out.-nycat