Tulipomania Blowoff Contest: Why and When will it end? Message Board

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Non-Tech : Tulipomania Blowoff Contest: Why and When will it end?

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To: Sir Auric Goldfinger who wrote (3180)	11/17/2000 8:41:13 PM
From: RockyBalboa	of 3543

More on Schrader washingtonpost.com A Net Pioneer's Loan Plight By Dina ElBoghdady Washington Post Staff Writer Friday, November 17, 2000; Page E01 PSINet Chairman William L. Schrader, one of the early catalysts of the Washington area's Internet boom, is caught in a financial squeeze, prompting a bank to seize and begin selling his entire stake in the company. Schrader had pledged his 11 million shares as collateral for a $25 million personal line of credit at Bank of America. Although the stock sale is unrelated to PSINet's operations, the dramatic fall in the company's stock price--from about $60 in March to $2 yesterday--prompted the "margin call." The value of the shares that Schrader put up to secure the loan apparently fell below the amount he owed. Schrader could not be reached for comment. A spokesman for Ashburn-based PSINet had no comment beyond a printed announcement, which was released after the stock market close. According to documents filed with the Securities and Exchange Commission, Schrader owed $22.8 million of principal and interest on his credit line as of March, when the document was filed. Yesterday's announcement said the bank had begun the process of selling "some or all" of those shares. The forced stock sale is the latest twist in Schrader's personal travails as a fiercely independent chief executive whose company spent big and took on an enormous debt load to fund one of the world's largest networks for Internet traffic.

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