No Firm Lessons From the IPO Trail

One reason journalists are so fascinated with IPO money is that most of them won't ever get near a penny of it. Then again, IPO features in Vanity Fair and Money prove that plenty of people who stand closer to the IPO pipeline won't be raking in the really dazzling cash, either.

Vanity Fair's look at what it pegs as the "surreal, get-rich-quick terrain" of IPOs seems to be populated with as many losers and oddballs as winners. The glossy monthly hailed the one-time record-setting opening day of but soft-peddled the company's subsequent fall. Sure, the stock is way off, trading for around $8 from its high of $63.50, and the company's business plan is hopelessly passe, writer Nina Munk noted. "Still, to adolescent girls and some boys, [company founders Todd Krizelman and Stephan Paternot] are gods."


Munk followed the logic of another Net hopeful, NetZero, which has cast its fate with CEO Mark Goldston. But his two previous gigs weren't exactly raving successes, said Munk. Goldston couldn't restore a sense of cool to LA Gear or find the dough in Einstein/Noah's Bagels Corp., according to Munk. "[G]iven the shortage of competent executives these days, Goldston may have been the best NetZero could do," Munk wrote. founder Joseph Park told Munk that starting a Netco was all about upside. If his company should tank, the 28-year-old figures he'll apply to B-school with a killer resume. "The downside is very limited," he said. Investors who bought at $63.50 might disagree.

Money's Rob Turner wondered what becomes of paper millionaires after the Big First Day. To find out, he trailed software exec Dave Dunlap through an eight-month lock-up period after Dunlap's employer, Intraware, went public last February. Dave and his wife have two kids, two mortgages (one a second mortgage on their home), and two leased cars. They owe his parents $17,500. They're counting on 100,000 shares of Intraware stock to get them out from behind the financial eight-ball.

Over the eight months, the Dunlaps' stake went from $1.6 million all the way up to $5 million - and then back down again. Turner worked in some nice details on the couple's experiences. Dunlap could tell he was being hit up for a fat donation when a college friend, now working as a fund-raiser for their alma mater, asked to meet for drinks and then brought along the school's legendary former athletic director to encourage Dunlap's generosity. Still, Dunlap ate up the fat-cat moment, and even shared with Turner his momentary daydream of seeing his name stitched into the school's lacrosse jerseys.

When Dunlap sold off 13,000 shares at $18, the $166,000 that he pocketed after taxes was a nice piece of change but it could not have bought a Lear jet. The sale felt anticlimactic, Dunlap told Turner. Maybe so, but the throngs of journos with their noses pressed against the window would take that anticlimax any day.

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