Same Old Story, Same Old Song and Dance
Welcome to Part One of Seattlest's exhaustive investigative report on when, if ever, the city's appetite for exhaustive investigative reports on dot-com excess will be sated.
Not yet, apparently. The Seattle Times published their series of investigative reports into local tech giant InfoSpace over the weekend and, while it does make for a decent read, ultimately it's the same old story.
The Times' investigation found:• InfoSpace officials misled Wall Street and the public about how their company was doing, concealing that revenues were falling far short of expectations.
• Much of InfoSpace's reported revenue came from "lazy Susan" deals, whereby company officials invested in other firms that turned around and gave back the same money.
• Wall Street analysts, including famed dot-com guru Henry Blodget of Merrill Lynch, privately expressed grave concerns about InfoSpace while at the same time publicly touting its stock. In a private e-mail to colleagues, Blodget asked, "Is this really a world-class company, or just a world-class storyteller?" Soon after, he gave InfoSpace stock his highest rating.
• While investors clamored to buy InfoSpace's highly touted stock, company insiders were unloading it. Two executives later angled to get around trading restrictions by asking for demotions to sell stock before its value evaporated.
The paper published a neat little timeline here and here is the tired, but required, Itemizing of the Bling article.
