Subject: Re: Lawsuits Name Caldera
From: Peter Wayner <>
Date: Fri, 10 Aug 2001 10:09:51 -0400

>  The plaintiffs are really going after the investment banks.  The
>issuing companies are simply getting caught in the crossfire.  No one
>expects the issuing companies to be found liable of anything.
>The investment banks on the other hand may be guilty.  The problem
>for the plaintiff lawyers however is how do that they prove damages, if the
>result of the banks activities is that their clients, the people who bought
>shares in the the IPO, "suffered" by having those shares increase in price
>more than they would have otherwise.  (Assuming the banks are actually guilty
>of the activities they are being accused of.)

Guilty of breaking the law is different from overall scandalous 
behavior. Many of the investment banks claim they broke no laws in 
their share allocation procedures and that may be true, but that 
doesn't mean that the behavior didn't do lasting harm to the 
technology sector. Many people invested money in corporations and 
that money was diverted. The corporations may have been nutty, but 
maybe they would have survived if they got the capital the market 
intended to invest in them.

I remember the first time I realized that the "pop" on the IPO day 
was not a measure of the IPO's success, but a measure of how much 
money was being diverted away from the company. No system can survive 
when the masters are skimming 50-90% of the cash. Unfortunately, the 
open source companies were the biggest victims of this game. Sigh.