Chapter 8 - April 2, 2003 - Episode 3Listen to podcast
Interview with Louise Lazard Continued
[The interview recommenced at 10:02 AM]
Q: Are you feeling well enough to proceed?
A: Yes, yes. Let’s go on, please.
Q: Did you ever see Larry place the gun to his head?
A: No. They said he did that in the office but I never saw him do it.
Q: Why did they say he put the gun to his head in the office?
A: I don’t know. It was dumb. Some sort of company ritual. Some way of saying a decision was made.
Q: Did he check to see if the gun was loaded before he placed it to his head?
A: I don’t know. How would I know? Are you trying to say now this was an accident? How could the gun get loaded? Guns don’t load themselves.
Q: I’m not trying to say anything; I just ask questions. And you’re right: sometimes answers just lead to more questions. Do you know of any case where Larry fired the gun? Did he have ammunition for it?
A: I know it was empty when Larry got it from his friend; I made him check. I don’t know of his ever buying any ammunition for it. It wasn’t registered; at least, it wasn’t registered to Larry and he’s an ex-con, remember. So he wasn’t about to try to get a pistol permit from the local police.
Q: And yet he carried this concealed weapon to New York where it was, among other things, a Sullivan Law violation.
A: Is that a question?
Q: Yes. Did Larry take the gun to New York himself? If so, why?
A: I think it’s a little late to convict Larry of an O’Sullivan Law violation, whatever that is. I already told you he took it in because I didn’t want it here.
Q: Did you hear anything else about Larry and the gun?
A: Not that I remember. Can we talk about something else?
Q: Sure. What was it like for you and Larry when hackoff went public and you became fabulously rich? How did people react to you?
A: Well, for one thing we didn’t get any money when hackoff went public. All the money from that stock sale went to the company. But about six months later there was what’s called a secondary offering. The company sold more stock at a much higher price and raised much more money. And this time insiders were allowed to sell some stock as well. The VCs sold a bundle and made a fortune. We sold about twenty‑five million dollars worth ourselves; it was only a tiny portion of the stock we had. Of course, we had to pay taxes on that, but still it was a lot of money.
Q: The newspapers said you were “billionaires”; twenty-five million is a lot of money but it isn’t a billion. Was that just an exaggeration?
A: No, not exactly. The stock we had left was worth a billion or so on paper, so I guess we were billionaires. But we weren’t allowed to sell any more stock for six months and then, by the time we could sell, it had gone down so much that we decided to wait for it to go up. But it never did. Not much. So we hung onto our stock and it was worth less and less.
Q: Do you still have the stock?
A: Yes. We gave some to charity but we still have most of it.
Q: And what is that worth now?
A: I don’t know exactly; a couple of million maybe. And it would be hard to sell that much stock without driving the price down even more. It’s funny; we sold about five percent of our stock for twenty-five million and now the other ninety-five percent isn’t even worth a fraction of that. Not funny, I mean, but strange. None of it was very real.
Q: How did people treat you when you had all that money?
A: Well, a lot of stock brokers called all the time and wanted to manage it for us. Realtors called, people like that. It was like we won the lottery. I guess we did in a way.
Q: Did your friends treat you differently?
A: A lot of our friends have money — serious money — themselves. They either inherited it or earned it or even were dotcom millionaires themselves. So just having money wasn’t so strange. We hadn’t been poor before, either. The friends-and-family part was very strange, though. Do you know what friends-and-family is?
Q: Yeah, I do. Once a suspect offered me some friends-and-family stock in a company he was related to somehow. Couldn’t take it since he was a suspect. In fact, I added attempted bribery to the charges against him. Too bad, though, the stock tripled on opening day. I could’ve made a bundle. But why was the friends-and-family part “strange”?
A: Well, everybody wanted some stock; everybody, even the cleaning lady. We couldn’t possibly give people a chance to buy as much stock as they wanted; there wasn’t that much. Larry offered friends-and-family stock to his cousins. One of them is a lawyer and he threatened to sue Barcourt because they wouldn’t give him more. That’s how bad it got. Some people were very grateful, though. One of my cousins even made enough money on it when she sold to dump her worthless husband and start a new life. A single Mom we know was able to send her daughter to college. Even my father bought some stock; it was the first time he’d talked to us since Larry went to jail. But then people got mad at us.
Q: Why did they get mad at you?
A: Either because they sold too soon or because they didn’t sell soon enough.
Q: I don’t get it. Can you explain?
A: The IPO price was fifteen dollars. So people bought their stock at that price. From there, the stock eventually went up to 160 dollars a share or something like that. So all along the way, people were selling their stock. If they sold it at twenty, they were mad when it went to thirty. If they sold at 100, they were mad when it went to 110. But those were the lucky ones, they all made money.
From 160 dollars, or whatever it was, the stock came all the way down in two years to less than a dollar. So everybody who didn’t sell was even madder at us. Some people even bought more stock as it was going up. If they sold it, great, they made even more money. If they held it too long then they lost money on that too. Some people, on paper, had enough profit to retire early. But, in the end, instead of retiring early, they lost some of the retirement money they’d had in the first place.
Q: And those people were mad at you?
A: Some of them. Some were great; they understood that it was their decision when to sell and when not. Others, I think, somehow felt that we had cheated them or that we owed it to them to tell them when to sell — as if we knew ourselves. And we weren’t allowed to say anything. That was hard — hard not to say anything and hard to get people to understand that we couldn’t. We had inside information – not that knowing it would have done them much good – but we did and so we could never talk about the company. People go to jail for doing that. Been there, done that, don’t want to do it again. But they didn’t understand.
Q: They wanted you to give them insider information?
A: To be fair, I’m not sure they always understood that’s what they were asking for. They would say things like: “How’s the company doing?” Maybe that’s just small talk but it’s a question we can’t answer except by quoting whatever the company said publicly. Then we sound like jerks. Even when people would ask me: “How’s Larry?” I always suspected they were asking whether they should sell their stock or buy more.
When my father died, my mother wanted to know whether to sell the stock or not. He’d held on. It wasn’t like him. I think he even told me he sold it but he didn’t. It wasn’t worth much by the time he died. But, legally, I couldn’t tell her what to do. I told her to sell all of Dad’s stock — he had a lot of different stocks — that she shouldn’t be holding any stock at all, that she should buy an annuity. Probably it was against the law for me to even tell her that. I don’t know.
Once a lady came up to Larry at a cocktail party, somebody we’d just been introduced to, a friend of a friend. She said she was an investor and she bought and sold our stock all the time and other stocks too. Wasn’t it exciting. Then she asked Larry what kind of earnings he was going to announce a week later.
Larry treated it like a joke. He talked about some doctor that just got indicted for giving out insider information about his cancer drugs or something.
Then she put her face up very close to his — Larry hates it when people do that — and said: “I know you can’t tell me anything, but I’m watching your face for a hint. Now I’ll ask my question again.”
Q: What did Larry do?
A: He over-reacted as usual. He told her to go fuck herself and he walked away. The host of the party wasn’t too happy with us. I wasn’t too happy with Larry that night. But people did get weird and it was weird. And now ... shit, Larry’s dead. That’s worse.