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Chapter 7 - The Secondary, February 3 - March 28, 2000 - Episode 5
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Email, February 3, 2000
From: Larry Lazard [mailto:larryl@hackoff.com]
Sent: Thursday, February 3, 2000 6:10 PM
To: Eve Gross
Subject: JOURNAL
Eve:
How come those assholes at antihack get their secondary listed first in the journal article. It positions them like they’re the leader in the field. We’re the leader; we were public first; our market cap is a hell of a lot higher. Why do we get treated like second class shit?
From: Eve Gross [mailto:eveg@hackoff.com]
Sent: Thursday, February 3, 2000 6:15 PM
To: Larry Lazard
Subject: RE: JOURNAL
Lar:
I checked and these stories get to the journal from the brokerage firms. Looks to me like First Boston did a better job than our friends at Barcourt in getting this positioned. Or maybe they just got to them 1st. I can call the reporter if you want but since the facts are right I don’t see much to complain about.
Eve
From: Larry Lazard [mailto:larryl@hackoff.com]
Sent: Thursday, February 3, 2000 6:18 PM
To: Eve Gross
Subject: RE: JOURNAL
No, let it go. Its just one more fuckup by Barcourt. Couldn’t be that antihack story got there 1st since we filed during the day and they didn’t file until after the close.
But we’re going to have to work hard at our positioning during the roadshow. Investors are going to have to decide how much hackoff to buy and how much antihack to buy and we want the decision to always go our way.
That’s your job and Barcourt’s not going to help at it.
From: Eve Gross [mailto:eveg@hackoff.com]
Sent: Thursday, February 3, 2000 6:22 PM
To: Larry Lazard
CC: Aaron Smyth
Subject: RE: JOURNAL
Lar:
It is a quiet period again with the prospectus filed. So I am going to need good guidance from you and Aaron on what we can and can’t say and what kind of press releases we can put out.
I’m glad to do my part but want to set your expectations right that my hands are tied to some extent during this period.
Eve
From: Aaron Smyth [mailto:aaronsm@hackoff.com]
Sent: Thursday, February 3, 2000 6:32 PM
To: Eve Gross
CC: Larry Lazard
Subject: Privileged attorney-client communication
Eve:
You are correct that we are again in a quiet period and must be extremely careful not to make any announcement which the SEC could interpret as hyping our stock. They have been known to slow-roll the review of a prospectus when they think the company is frontrunning. They also could force us to postpone the offer even after the prospectus is approved if they think we are trying to promote the transaction in any way other than the prospectus.
Aaron
From: Larry Lazard [mailto:larryl@hackoff.com]
Sent: Thursday, February 3, 2000 6:45 PM
To: Aaron Smyth; Eve Gross; Frank Folger
Subject: RE: Privileged attorney-client communication
Of course we understand that we can’t hype the stock. However, I assume that we are still allowed to make the kind of announcements that are critical to running the business (as opposed to the stock). For example we always announce major new customers if they let us. We do that for the business reason that one name customer attracts another.
So I assume, for example, if Frank Folger lights a fire under the salesman whos dicking around with the iHudson.com account and gets that closed and they give us permission then we could announce that in the ordinary course of business.
Frank, I really want that done regardless of secondary.
From: Aaron Smyth [mailto:aaronsm@hackoff.com]
Sent: Thursday, February 3, 2000 6:50 PM
To: Larry Lazard; Eve Gross; Frank Folger
Subject: RE: Privileged attorney-client communication
You are correct that we can make announcements in the ordinary course of business. However, I would be extremely careful. The SEC doesn’t have to agree with our interpretation of the ordinary course of business. In fact, they don’t even have to talk to us if they think we’re frontrunning, they can just slow roll us and we may not even know why.
From: Frank Folger
Sent: Thursday, February 3, 2000 7:00 PM
To: Larry Lazard
Subject: RE: Privileged attorney-client communication
Boss:
Two things that would help us close iHudson.Com.
You know that the second biggest online bookseller in the world isn’t going to give us equity so obviously this will be a cash deal. But cash is tight for them so aggressive pricing would really help. Are you approving that?
An extra spif for Oliver if he closes this should help. Remember that if we give them a low cash price this won’t help him much toward quota. If we want him to spend time on it, we’re going to have to make sure he can make some money.
Frank
From: Larry Lazard
Sent: Thursday, February 3, 2000 7:15 PM
To: Frank Folger
Subject: iHudson.com
You mean if we give the product away and overpay the salesman, then maybe he can make a “sale”?
From: Harvey Maklin
Sent: Thursday, February 3, 2000 7:45 PM
To: Larry Lazard; Donna Langhorne
CC: Rachel Roth
Subject: Roadshow Team
Larry and Donna:
I have some news that I think you’ll welcome. The senior banker accompanying you on the secondary roadshow will be Rachel Roth. You know her, of course, from your IPO. Since then she’s been promoted recognizing her outstanding contribution to companies like hackoff.com.
Rachel is, of course, very familiar with hackoff already and will, I’m sure, do an excellent job on the roadshow team.
Accompanying Rachel and assisting her will be Jason Jamfus who has recently rejoined Barcourt after pausing to get his MBA at Columbia. I’m sure he’ll be an excellent member of the team as well.
I hope to join you myself for some of the accounts in New York and possibly Philly.
Please let me know if there is anything else I can do.
Yours truly,
Harvey
###
Larry picks up his desk phone and dials Frank Folger’s extension. When he gets voice mail, he hangs up, then dials Frank’s mobile phone.
“Taking off early?” Larry asks Frank when he answers.
“No,” says Frank. “Kid’s got a hockey game tonight so I’m gonna watch. Always on the phone, though.”
“You mean ‘yes’,” says Larry. “You’re at a hockey game.”
“What’s up, boss?”
“iHudson.com,” says Larry. “At least I want it to be up. I want to be able to announce it.”
“I hear you,” says Frank. “I sent you an email with some suggestions how we can close it.”
“Yeah, I answered your email,” says Larry. “You want to give the product away and pay the salesman extra for ‘selling’ it. If Oliver can’t do the job, why don’t you give the account to someone who can?”
“I have a lot of confidence in Oliver,” says Frank. “He does well at the big accounts. They like him.”
“He isn’t closing shit, they like him so much.”
“These are long sales-cycle accounts,” says Frank. “That’s why I’m suggesting we find a way to pay more to tide him over so he can make some money while he’s waiting for the elephants to fall.”
“He’s not supposed to wait. When you hunt elephants, you shoot them. That’s what makes them fall down. You don’t just sit around and hope that they’ll trip or something, then cut off their heads for your game room. Look, I don’t want to have a theoretical discussion about selling,” says Larry. “I want to be able to announce closing iHudson.com. You should want this too. You’re selling stock in the secondary. You want to sell at a high price or a low price? Not that we don’t want the account anyway but this would be a very good time to announce it. Capiche?”
“I get it, boss,” says Frank. “Believe me, I get it. I’ll be all over Oliver like flies on shit. But we’ll close faster if I can have some freedom on price. And it really would help to make Oliver whole on this.”
“I’ll give you some room on price; you get me an announcement,” says Larry. “And tell Oliver if he doesn’t get this for us we’ll fire his lazy ass and he can go somewhere else and wait for elephants to fall.”
“I think some positive incentive too would help,” says Frank.
“Tell him if we get to make an announcement of iHudson.com this month — don’t tie it to the secondary — we’ll be thinking about that when we figure his options after the secondary.”
“Salesmen care more about cash than options,” says Frank.
“When they see how rich you get in the secondary, they’ll learn about options,” says Larry. “One other thing…”
“Yeah, boss.”
“Don’t send email with ‘attorney-client privilege’ in the subject line unless there’s a lawyer in the address list. And don’t ever say anything in email about wanting to announce iHudson because of the secondary.”
“Right, boss.”
“Good luck with the hockey,” says Larry. “Bring me an elephant.”
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Comments
Tom, where are the thursday and friday episodes? Technical difficulties?
Thanks.
Posted by: Michael Parekh | November 11, 2005 10:34 AM
How come those assholes at antihack get their secondary listed first in the wsj article.
You mean the bsj (broad Street Journal, with its trademark lowercase 'b'), of course. Same in the following e-mails.
Global search-and-replace is never a substitute for human editors :-)
Posted by: Allan | December 5, 2005 03:25 PM
(You'll probably want just "The Journal" in the book for both the text and the e-mail subject lines: "BSJ" would be too confusing. Unless the real WSJ claims trademark on that as well.)
Posted by: Allan | December 5, 2005 03:27 PM
Good points both, Allan. Will be fixed in print. (Am avoiding online fixes because they make things reappear in feedreaders)
Posted by: Tom Evslin | December 5, 2005 06:09 PM