To: Kanetsu who wrote (49150 ) 3/15/2001 9:33:05 AM From: Rande Is Read Replies (2) | Respond to You are right, Kanetsu. . .I like it!Instead of the greatest ever legal creation of wealth [tech spike], the high-tech financial bubble represented the greatest ever legal transfer of wealth -- from retail investors to insiders. insiders get their stock for pennies a share, if that. Thus, while an insider may have recently seen his portfolio slip from $50 million to $5 million, he probably paid only $100,000 for his stock to begin with, so he's still ahead in terms of real money. But when individual investors see their stock portfolios plummet, it's real. The truth is, little investors never stood a chance, because they simply don't have the same access, both to key information and to early deals, During the Nasdaq bubble, investment banks would routinely give hot new IPO stocks -- free -- to corporate executives, venture capitalists and other decision-makers sitting on the boards of companies whose business the banks wanted. These privileged decision-makers would then flip their shares on the first day of the IPO for quick profits. And while the investment banks were giving out free stock to their favored clients, they were also giving out bad advice to their mom and pop customers. Never before has so much wealth been transferred from one group of people to another in such a short time. Maybe if the Securities and Exchange Commission steps in to restore fairness it never will again. Michael C. Perkins is a founding editor of Red Herring magazine and co-author of "The Internet Bubble." He and Celia Nunez are authors of "A Cool Billion," a novel about Silicon Valley.
