By Maureen Farrell
On a wintery Thursday, Mary Meeker stood on the floor at the New
York Stock Exchange celebrating the listing of Lending Club Corp.,
a peer-to-peer lending firm she helped nurture to the public
boards.
That same morning, Henry Blodget was a guest on business
television, offering up his views on the future of the Internet and
the latest hot Web stocks.
Across the country, Frank Quattrone and his team had just closed
one of the biggest deals in his advisory firm's history, the $8.3
billion acquisition by SAP SE of Concur Technologies.
What sounds like a scene from 1999, the heyday of the Internet
boom, actually played out just this winter.
Fifteen years after the implosion of the dot.com bubble--and the
ensuing public pillaring of high-profile Wall Street
names--technology stocks are back.
And so are many of their original cheerleaders.
Ms. Meeker and Messrs. Blodget and Quattrone are three names
inextricably linked to the technology boom of the late 1990s. In
some ways, their careers, while diverging, have followed the
trajectory of the Nasdaq Composite Index, which peaked in March
2000, then cratered to its postbubble nadir in October 2002, before
beginning a slow but volatile ascent to record levels on
Thursday.
"They were spokespeople for [the Internet] movement," said Steve
Case, former chairman of AOL Time Warner Inc. "People thought they
were brilliant when stocks were going up and not so brilliant when
stocks were going down."
Mr. Case said he is "not surprised that they are still standing
and indeed thriving."
Many others across Wall Street found themselves caught up in the
hype. And few saw the carnage to come.
"These were fundamentally really bright people who knew how to
write and explain companies and what technology would do to the
marketplace," said Eric Dinallo, who worked under then-New York
Attorney General Eliot Spitzer on the investigation and prosecution
of Wall Street analysts. Mr. Dinallo is now a partner at the law
firm Debevoise & Plimpton LLP, said. The regulators' opinion
"was that they were engaged in a structure that left a lot to be
desired as far as transparency and conflicts of interest."
Some of them disappeared from the limelight for years and then
returned, some have kept low profiles, while some have remained in
prominent positions. Here is a look at what some people, once
synonymous with the Internet boom, are doing now:
Henry Blodget
Mr. Blodget first generated intrigue and applause for his call
on Amazon.com Inc. in late 1998. While then working as an analyst
for CIBC World Markets, Mr. Blodget put what was considered an
outlandish $400 target on Amazon.com's stock, which was then
trading at $230. Within weeks, Amazon's stock hit Mr. Blodget's
target and surpassed it.
Mr. Blodget reached fame as Merrill Lynch & Co.'s Internet
analyst, helping champion companies like Webvan Group Inc. and
eToys Inc. He was later fined and banned from the securities
industry for publicly telling investors to buy stocks while
privately criticizing them. In 2007, he started Business Insider, a
business-news website that has grown rapidly and raised almost $60
million in funding. As Internet stocks have staged a renaissance,
he has become a ubiquitous commentator on television and
online.
Mr. Blodget didn't comment for this article.
Frank Quattrone
It once again pays to be a friend of Frank.
Since he opened his new advisory firm, Qatalyst Partners, dozens
of tech executives and partners at investing firms can thank Mr.
Quattrone and the firm, where he serves as chief executive, for
helping raise millions of dollars. In the past year, Qatalyst
advised MyFitnessPal on its $475 million sale to Under Armour Inc.;
Concur Technologies on its sale to SAP; and the video site Twitch
Interactive Inc. on its $970 million sale to Amazon.com.
At the peak of the boom, Mr. Quattrone, then at Credit Suisse,
was the most influential technology banker in Silicon Valley,
receiving a $120 million pay package in 2000. But his career ground
to a halt after the bubble burst, and Mr. Quattrone was convicted
of trying to obstruct a regulatory probe into alleged abuses at the
bank under his watch. That decision was later overturned on appeal
and the charges were dropped.
In 2008, he started Qatalyst Partners.
Neither Mr. Quattrone nor representatives from Qatalyst returned
requests for comment.
Mary Meeker
Unlike Messrs. Quattrone and Blodget, Ms. Meeker wasn't forced
to defend her behavior in court and held onto her job.
Still, critics said she gave some Internet stocks positive
ratings to help Morgan Stanley land banking business, but she was
never charged with doing so and has denied that her objectivity was
compromised. As Internet stocks cratered in 2000 and 2001, she held
onto her buy ratings on a host of stocks that ran into the ground.
Some, like Amazon.com, have since rebounded.
In the late 1990s, a buy rating from Ms. Meeker was seen as the
ultimate seal of approval on technology stocks, and investors also
hung on her macro views on the industry. Her 1995 research report
for Morgan Stanley, "the Internet Report," was turned into a book
that became a best-seller.
While still heavily involved in Silicon Valley, she wields less
influence. In an email, Ms. Meeker said "the race is won by those
that build platforms and drive free cash flow over the long-term (a
decade or more). That was my view in 1990, 1995, 2000, 2005, 2010,
and it remains the same today."
Jack Grubman
Another former star of the dot-com era had a swift fall from
grace but hasn't returned to prominence in the investing world.
During the height of Nasdaq's previous boom, Jack Grubman, the
star telecom-research analyst at what was then Salomon Smith Barney
and is now part of Citigroup Inc. Mr. Grubman was banned from the
securities industry for life by the SEC in 2003 for allegedly
providing misleading research, and he paid $15 million in
fines.
Shortly thereafter, Mr. Grubman founded Magee Group LLC, a
consulting firm for telecom and technology companies, and while it
is possible to find his "industry insights" on his website, he has
landed few customers.
Mr. Grubman said in a statement his small customer base is by
design. "I purposely did not want to build a big infrastructure to
service the masses. I don't need the money, so am not chasing every
last buck but rather situations which are interesting."
Ryan Jacob
Ryan Jacob had star power in the late 1990s. The fund he ran for
Kinetics Mutual Funds was simply and aptly named The Internet
Fund.
Mr. Jacob appeared frequently as a commentator on soaring tech
stocks.After taking over the fund in 1997, Mr. Jacob generated a
return of more than 200%, assets under management swelled to over
$1 billion from $22.2 million the year before.
Later that year, Mr. Jacob launched his own fund, the Jacob
Internet Fund. His timing, like that of many others, was off. The
fund fell 79% in 2000 and 56% in 2001.
"I look at that boom-bust period as being pretty difficult as we
saw extremes on both sides that we'll never see again in our
lifetimes," he said.
Like the Nasdaq, the Jacob Internet Fund has made a comeback,
returning nearly 11% on an annualized basis over the past 10
years.
Mr. Jacob still serves as chairman and chief investment officer
at Jacob Asset Management, with roughly $120 million in assets.
"I'm proud that we've been able to diversify and grow the firm and
basically take it back from the ashes."
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