APRIL 16, 2001
BUSINESSWEEK E.BIZ -- COVER STORY
How Some Investment Bankers Performed
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| Here are the companies behind some of the biggest losers in the Net stock crash. Data as of the start of 1997.
MERRILL LYNCH
THE PLAYERS: Star analyst Henry Blodget has been hailed as an Internet guru, but the firm's track record in taking Net companies public has been terrible.
NUMBER OF IPOs: 20
AMOUNT RAISED: $2.1 billion
AVERAGE RETURN: -82%
TROUBLED DEALS: Fifteen of the 20 companies Merrill took public are trading below their original offering price, and another two have gone bust. Pets.com went public in February, 2000, then shut its doors a mere 10 months later. The e-commerce site Buy.com is struggling to stay alive, with its stock down to 25 cents from its IPO price of $13.
ROBERTSON STEPHENS
THE PLAYERS: BankBoston acquired San Francisco investment bank Robertson Stephens in 1998 to get a piece of the action. The deal helped make the bank, now part of FleetBoston, a player in tech IPOs. Winners such as online research provider Multex.com Inc. didn't outweigh losers.
NUMBER OF IPOs: 38
AMOUNT RAISED: $2.3 billion
AVERAGE RETURN: -65%
TROUBLED DEALS: College textbook seller VarsityBooks went public in February, 2000, at $10 a share, missed its financial projections, and now trades at 25 cents. Divine InterVentures went public as a Net incubator in July, 2000, at $9 a share. Now its stock is at less than $2, and it has changed its mission to developing software.
CREDIT SUISSE FIRST BOSTON
THE PLAYERS: Its tech practice got a huge boost when it recruited star banker Frank Quattrone in 1998. Since then, the volume of Net deals has rivaled Goldman and Morgan Stanley. CSFB has had some hits, including Openwave Systems, but overall returns for investors have been lousy.
NUMBER OF IPOs: 75
AMOUNT RAISED: $5.5 billion
AVERAGE RETURN: -41%
TROUBLED DEALS: The online mortgage site Mortgage.com went public in August, 1999, and announced it would shut down in October, 2000. Car site Autoweb.com has dropped 97% from its IPO price, to 19 cents, after missing estimates.
GOLDMAN SACHS
THE PLAYERS: The prestigious firm may have tarnished its reputation in the Internet crash. Although its average return was not terrible because of home runs such as eBay, it took public dozens of Net companies that are now trading below their IPO price.
NUMBER OF IPOs: 47
AMOUNT RAISED: $5.7 billion
AVERAGE RETURN: -16%
TROUBLED DEALS: Thirty-eight of Goldman's 49 Net initial public offerings are trading below their offering prices. In addition, toy seller eToys and high-speed Net access provider Northpoint Communications both folded less than two years after Goldman took them public.
Data: Thomson Financial Securities Data
Ranking the Internet bankers
How have investment banks performed in taking Internet companies public? Here's a look at the average returns for the Net companies taken public since 1997 by each bank.
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Morgan Stanley & Co.
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20%
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Salomon Smith Barney
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-15%
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Goldman Sachs & Co.
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-16%
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Deutsche Bank AG
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-41%
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CS First Boston
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-41%
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Lehman Brothers
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-59%
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JP Morgan
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-59%
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Bear Stearns & Co Inc
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-65%
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Robertson Stephens
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-65%
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Merrill Lynch & Co.
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-82%
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SOURCE: Thomson Financial Securities Data, Business Week
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Copyright 2001 , by The McGraw-Hill Companies Inc. All rights reserved.
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