a few more details in this excerpt
Swimming with Stock Analysts
By NOAM COHEN
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ASDAQ’S run for the roses in 1999-2000, the year and a half when the public greeted the arrival of each and every new Internet stock with wild cheers and fists full of money, was buoyed in part by well-heeled analysts who scanned the crowded stock market and recommended winners. Shunning traditional methods for assessing a company’s value, they spoke of paradigm shifts and made more TV appearances than David Brenner.
A star among them was Merrill Lynch’s Henry Blodget, who has since left the firm and is now at the center of an investigation by the New York attorney general, Eliot L. Spitzer. A series of e-mail messages subpoenaed by the attorney general’s office and filed with the State Supreme Court forms part of the case against the company, which Mr. Spitzer argues abused its position as a banker by allowing its business relationships to affect supposedly objective assessments of stocks. But the trove of messages, some of which are excerpted below, also give a firsthand view of life in the trenches in late 2000, when Internet stocks started to nose dive.
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In October 2000, the market was already turning, brokers were getting jittery, and sins that were ignored during the boom were suddenly given much more scrutiny. Here, Mr. Blodget receives a complaint from one of Merrill Lynch’s own brokers, Jeffrey A. Sexton, who relied on the company’s stock ratings.
From: Jeff Sexton
To: Blodget, Henry
Subject: Handwritten Infospace Annual Report!?!?
Would you or someone in your office please respond to the Dow Jones News Service article by Michael R. Sesit, Oct. 20, discussing a new study analyzing annual reports of new-economy companies? In that article, Infospace’s is held up as a ‘‘horror story’’ due to its ‘‘high school exam format’’ and ‘‘some pages that are handwritten.’’ . . . A handwritten annual report for a company you have a buy rating on with a price target of $100 is disconcerting to me to say the least. . . .
Jeffrey A. Sexton
Mr. Blodget then forwards the message to a member of his research team, with an added request.
From: Blodget, Henry
To: Syer, Virginia
FW: Handwritten Infospace Annual Report!?!?
I am so tired of getting these things. Can we please reset this stupid price target and rip this piece of junk off whatever list it’s on. If you have to downgrade it, downgrade it.
So embarrassing.
h
But before Mr. Blodget’s team can respond, Mr. Sexton writes back with a mea culpa.
From: Jeff Sexton
To: Blodget, Henry
Subject: Infospace Annual Report
My apologies. I have read the 1999 annual report for Infospace. While weird and difficult [to] read, it . . . [s]eems like the study cited in the article was attempting to bash Infospace and new-economy stocks. Surprise.
From: Blodget, Henry
To: Syer, Virginia
Phew. Still would love to reset the price target to $30 or something. |
