| BUSINESSWEEK ONLINE : SEPTEMBER 13, 1999 ISSUE | ||||||||
| ||||||||
 | ||||||||
| NEWS: ANALYSIS & COMMENTARY
$276 Million: Now That's Motivation To Anthony Robbins, success is a matter of ''Awakening the Giant Within.'' In his case, that giant is worth a ton of cash. The broad-jawed spokesman for self-esteem pulls in more than $80 million from sales of books, tapes, and seminars annually. And now, he's self-helping his way into the dot.com craze. Trading on little more than name and charisma, the 39-year-old has become chairman and majority owner of a publicly traded Net company whose value now exceeds $480 million. ''We are developing the eBay of personal and professional empowerment,'' says Robbins. The new company, GHS Inc., has no revenues from Net operations. It doesn't even have a Web site yet. In fact, the company has existed only as an obscure provider of medical services which, through what's known as a reverse merger, is giving Robbins a publicly traded stock without the time-consuming and disclosure-intensive process of an initial public offering. This maneuver has been managed by media banking powerhouse Allen & Co., a major investor in the original company. SHELL GAME. Here's how it works: GHS's medical business is being spun out to shareholders in a separate company. That leaves a public shell company from which Robbins will launch a yet-to-be-named self-improvement Web site that hopes to include many of the brand names of the industry. The new dot.com will get the $3 million in cash that GHS had on hand and $15 million that Allen & Co. has raised through a private placement. This backdoor route to public markets is usually associated with companies that have spotty records and shady pasts, not proven commodities like Allen and Robbins. But Allen & Co. defends the financing procedure as a perfectly sound way of creating value for GHS shareholders. It also acknowledges that by the time GHS got its new site up and running and was ready for an IPO, the dot.com euphoria could have subsided. So far at least, the deal has proven to be very lucrative for both banker and motivator. Since May, when Wall Street got word that Robbins was coming aboard and GHS would be recreated as a dot.com, the company's stock has soared from 75 cents to $12. That has given Allen & Co. and some of its executives a $48 million paper gain on their original $250,000 investment in GHS 15 years ago. Robbins, who put in no cash, has a stake worth $276 million. What justifies that kind of gain? Not much. The self-help guru gave the new venture exclusive online rights to his name, which it will use to develop Internet self-help seminars, chat rooms, and E-commerce sites. And Robbins' current Web site, anthonyrobbins.com, will be folded into GHS. But his $80 million-plus business selling books and seminars will remain private. SELF-HELP HUB. Allen & Co. is hoping that Robbins' marquee name will enlist other self-styled gurus and academics. GHS has already purchased the online rights to San Francisco-based The Learning Access, which has more than 700 not-for-credit courses ranging from ''How To Find True Love'' to ''Indoor Gardening.'' No doubt, there is potential to be mined in self-improvement and personal enrichment--the market accounts for more than $7 billion in video, book, and other sales. But there is also a lot of potential competition, according to Forrester Research Inc.'s Evie Black Dykema, from sites for women, such as iVillage.com, to a slew of new virtual universities. Even for Tony Robbins, pulling this venture off might require a giant even bigger than he has inside. By Kathleen Morris in Los Angeles _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP |
|  |
 | |
RELATED ITEMS Where Net Startups Go to Be Born TABLE: Baby Company Hatcheries $276 Million: Now That's Motivation INTERACT E-Mail to Business Week Online | |||
