CSFB BLOODBATH
By ERIC MOSKOWITZ
April 8, 2003 --
Credit Suisse First Boston is laying off nearly 25 percent of its technology banking unit, The Post has learned.
About 25 of the group's 105 remaining bankers are to be put on the chopping block by the end of the month, because of the continuing drop-off in mergers and acquisitions and underwriting activity, sources said.
The group, sources said, is 50 percent behind internal projections for the year.
"These are the group's best people that are getting cut," said one source close to the firm. "But they shouldn't be surprised, because many of their former colleagues have been out surfing for the last 18 months."
CSFB officials declined comment.
Many of the layoffs are expected to be on the West Coast and in mergers and acquisitions.
The scale-back is the latest blow to the once-prized team of bankers and analysts who reported to ousted CSFB star tech banker Frank Quattrone.
Quattrone, who based his tech bank-within-a-bank in Palo Alto, Calif., was fired last month for declining to cooperate with NASD regulators.
He was later charged by NASD with manipulating the sale of once high-flying tech stocks.
CSFB CEO John Mack has been forced to make massive layoffs throughout the firm.
He is also about to hand over a check to states and regulators for $200 million to settle the probe into the firm's analyst conflicts of interest - after already handing over $100 million to settle IPO allegations last year.
Despite the cutbacks, CSFB is going out on a limb to prove it's still a factor in the tech biz.
Last week, the firm raised eyebrows by elbowing aside other major Wall Street firms - including Banc of America Securities, Goldman Sachs, Morgan Stanley and UBS Warburg - to solely manage a $750 million convertible bond deal for Yahoo! Inc.
The firm won the underwriting business by offering a better price to Yahoo! than its rival banks, making it a risky move. The terms of the deal were so aggressive that the word among market participants after the deal's pricing Friday was that CSFB may be stuck with most of the deal - meaning it could find itself up to $10 million to $30 million in the hole.
"I do believe this was a desperate attempt to generate activity subsequent to the loss of Quattrone," observed one market pro. "CSFB could've kept the whole [tech] department for this one trade."
CSFB fell to seventh in U.S. equity deals in the first quarter of 2003, down from fourth in the same period last year, according to Thomson Financial.
The firm did finish first in the dormant IPO market in the quarter, garnering a 39 percent global market share, CSFB said.
Overall, the entire CSFB unit - which minted profits during the bull market - reported a net loss of more than $1.2 billion last year.
"It's gone from boom to bust in tech there," said David Hendler, senior analyst at independent research firm CreditSights Inc. and a former CSFB equity analyst.
"These bankers are basically expensive overhead right now."
With Erica Copulsky and Jenny Anderson |
