>>3) All of the listed companies (including a spin-off from Xerox) appear to generate significant underwriting fees.
...You don't know how right you are.
Benny
Fees and even more. IPO is just the beginning. Look what follows IPO.
When Gary issued downgrade last time in Feb. 1998, I got p....d off at that S.O.B. and did some search on the Internet. The following is a copy of what I posted at that time on Yahoo.
Benny, you may remember that post from Yahoo.
He made himself visible. Doing search for 1997 year only, I easily found dozens of links to different media sources citing Gary Craft. I'm not paid to be his biographer, so I decided to look deeper in one only direction. I picked out Craft's activity with respect to SFNB, Security First Net Bank.
SFNB was taken public in May 1996 by Friedman, Billings, Ramsey & Co., Inc. (FBR). That was Craft's place of work at that time. On the IPO day it opened at $20 and within an hour was at $45. wired.com .
Then happened what usually happens to a much touted IPO - stock price started sliding down.
Few month later.
"PR Newswire, Thursday, July 11, 1996 at 11:15
Friedman, Billings, Ramsey & Co., Inc. (FBR) today alerted risk-oriented investors to significant upside potential in the shares of Security First Network Bank (NASDAQ:SFNB-$27.25), targeting a 12-month share price of $50. FBR continued its buy recommendation on the stock. FBR's electronic banking analyst Gary Craft said, "At the current price of $27.25, we feel the shares offer attractive upside. " Message 611321
That was a home run. Upside potential was so significant that within a year instead of the target price $50 stock hit $5.50 with almost no stops on the way down.
Let's follow Gary's reasoning:
"Gary Craft, a stock analyst with Friedman, Billings, Ramsey & Company who has issued a "buy" recommendation on the stock, expects 15 to 20 banks to sign up for Security Bank's whole services by year's end, with perhaps 10 of them up and running by then. "http://www.news.com/News/Item/0,4,2144,00.html
Just like that. Not bad for analyst. "Waiter, gimme 20 banks and soda."
His words did affect the market. Price kept flat for a while. I guess that was long enough for the underwriter (FBR) to dump remaining shares.
Since then failure became obvious to everybody. Gary has no problem explaining minor discrepancies between the target and real price. Nothing wrong with Gary. It's all stupid investors. "..said Gary Craft, an analyst at Robertson Stevens. "I think it is very difficult for investors to really appreciate the company ..." wired.com
He is not with FBR any longer. Now he is with Robertson Stevens. He keeps analyzing. His credibility is unspotted. Go Gary, go!
P.S. I'm not a lawyer. I cannot draw a fine line between a crime and mistake, but there's something fishy about Gary The Analyst. Oooops, he is a Vice President now. bai.org
I'm so sorry, Gary!
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