Compliments of Gary Korn:
"The April 13 edition of Forbes calls a short squeeze on AMZN per Morgan
Stanley:
4/13/98 Fortune 191
1998 WL 2501158
Fortune Magazine
Copyright 1998
Monday, April 13, 1998
Issue: April 13, 1998 Vol. 137 No. 7
Street Life
The Dealmaker Who Would be a Player
Andrew Serwer
More than any other investment banker, Bruce Wasserstein
personified the roaring '80s. Brash, pushy, arguably brilliant, and
definitely not suffering from an inferiority complex, Wasserstein and
his investment bank, Wasserstein Perella, seemed to be, or tried to
be, at the fore of every major takeover battle. Not for nothing was
Wasserstein dubbed "Bid 'Em Up Bruce."
Unlike many bankers of that era, though, Wasserstein has remained
active, most recently taking a role in the Morgan Stanley Dean Witter
combination and advising CSX in its run at Conrail. "I love this
business," Wasserstein told me recently. "I think the people who got
out may not have had the zest."
But now it appears that Wasserstein, too, is looking for a life
outside dealmaking. What he now wants, and in fact may have always
really wanted, is to be a player. After all, how satisfying is it
merely to prod CEOs? This is a man who wants to be a don, not just a
consigliere.
To that end, Wasserstein recently raised and has now invested $275
million, some of which has gone into what he hopes will become a
legal-publishing empire--certainly not the glamorous end of the media
biz, but that's what you get for a lousy $275 mil. Wasserstein
recently purchased American Lawyer magazine and several smaller
publications from Time Warner for $65 million, as well as The New
York Law Journal and The National Law Journal from Boston Ventures
for some$200 million. Wasserstein wants to increase the market value
of these companies to $1 billion. Let's just say that he has a way
to go.
Also in the mogul vein, Wasserstein has just completed a book
entitled, without irony, Big Deal. Wasserstein's book is to M&A what
Moby Dick is to whaling: that is to say, exhaustive. "This isn't
nuclear physics," Wasserstein says, "but there are just so many
interrelated elements." (Oh, that's why it took 791 pages!) In any
event, I must admit I ended up kind of liking his take on the deals
of the era and was struck by his observation that today's
transactions are even pricier than the infamous deals of the 1980s
but are masked because they're done with stock, not debt.
Does this make Wasserstein a player? Not yet. But check back in
ten years.
NO DRAG NET
Are Internet stocks unbelievable, or what? AOL, Yahoo, Excite,
and Amazon.com have all at least tripled over the past 52 weeks!
What's up with that? When I put the question to Morgan Stanley's
Internet goddess, Mary Meeker, she graciously e-mailed back--at 4
a.m., no less--a well-reasoned answer, which I have summarized here:
1. The net's growth prospects are so huge and so open-ended, and
the Internet is evolving so quickly, that ordinary valuation measures
don't apply.
2. There aren't many stocks that offer a play on the net, so the
demand for the few leading companies is way out of whack with supply.
3. Investors have been pulling out of recent downers like
Motorola, Intel, Oracle, and Compaq, and pouring into Net stocks.
4. Investors who shorted net stocks, especially amazon.com, got
squeezed.
5. The smart money heard about Street Life's Internet portfolio
and bid the stocks into the stratosphere.
No, chucklehead, she didn't really write that last one. But hey,
the five net stocks I picked on Feb. 4--Yahoo, E*Trade, Amazon.com,
AOL, and Cisco--are collectively up 17%. Beats owning Compaq!"
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