(Corrects paragraph 16 to s how that TheRealReal was founded in 2011, not 2012, and has 3.5 million members, not monthly users.)
By Jennifer Ablan and Heather Struck
NEW YORK, April 24 (Reuters) - The Nasdaq’s March 2000 peak brought with it a plethora of colorful personalities - Wall Street analysts, bankers and tech moguls - who saw their reputations tarnished once the bubble burst. Many found solid second acts long after the dotcom implosion hit them hard.
Now that the index has surpassed its prior peak, here is an update on some of the most notable names of the last Nasdaq boom.
Then: In his initial heyday, Henry Blodget called Amazon’s success early and earned $12 million a year analyzing internet stocks at brokerage Merrill Lynch (now owned by Bank of America). In 2002, he agreed to a permanent ban from the industry in a settlement of securities fraud charges - he was alleged to have trash-talked companies privately while publicly promoting them to investors.
Now: Backed by big players including Amazon.com founder Jeff Bezos, Blodget co-founded in 2007 business news site “Silicon Alley Insider” which was rechristened “Business Insider” in 2009, where he still serves as CEO and editor-in-chief. The site has 25-plus million visitors a month. (Disclosure: It is a client of Thomson Reuters and uses Reuters articles on its site.)
“Thankfully, for all of us, I’m not in the stock-market prediction business anymore. I do think the tech industry is in a boom that will end the way all booms do - in a bust,” Blodget said in an email. “But the magnitude of what’s happening today is just a faint echo of what happened in the 1990s.”
Business Insider made about $30 million in revenue last year, according to a source familiar with the firm. Asked if he intended to take it public, Blodget said, “there’s no reason to hurry.”
Then: The leading Silicon Valley banker of the dot-com era helped take dozens of companies public, including Amazon.com and Cisco. In 2000, his best year, Frank Quattrone made $120 million at Credit Suisse First Boston. Quattrone spent four years fighting charges that he obstructed a federal investigation into whether CSFB doled out hot IPO shares to favored clients in exchange for inflated commissions. In 2004, he was convicted of several charges and banned from the securities industry; that was overturned on appeal in 2006 and the ban was rescinded. The charges were dropped in 2007.
Now: Quattrone founded San Francisco-based investment bank Qatalyst Partners in 2008. It has been involved in dozens of multi-billion dollar merger and acquisition deals, such as Texas Instruments’ $6.5 billion acquisition of National Semiconductor in 2011 and Google’s acquisition of Motorola for $12.5 billion in 2012. Quattrone volunteers for the Northern California Innocence Project to address wrongful convictions and established the Quattrone Center for Fair Administration at the University of Pennsylvania Law School. He could not be reached for comment. MARY MEEKER: NOT ROYAL, STILL RICH
Then: Anointed “Queen of the Net” for her enthusiastic coverage of Adobe, eBay, Apple and more, Mary Meeker was one of a generation of bank analysts championing the Internet in the 1990s. Meeker, then Morgan Stanley’s analyst, was swept up in a massive investigation of Wall Street’s research practices, led by the New York attorney general’s office and the Securities and Exchange Commission. She was never accused of violating securities laws but the global case against Morgan Stanley and nine other brokerage firms led to a record $1.4 billion settlement in 2003.
Now: In 2010, Meeker joined Silicon Valley venture capital firm Kleiner Perkins Caufield & Byers as a partner. She leads KPCB’s Digital Growth Fund, targeting high-growth Internet companies. Meeker serves on the boards of Square, Lending Club and DocuSign and has been actively involved in KPCB’s investments in Twitter, LegalZoom, Spotify, Waze (acquired by Google) and Groupon.
Meeker was not available for comment. In mid-March, Meeker testified in the Ellen Pao gender bias case, calling Kleiner Perkins “the best place to be a woman” in venture capital.
Then: David Wetherell was CEO of the public holding and venture capital company CMGI, which he helped grow to more than $1 billion in annual revenue with his energetic buying of then-notable internet companies, including Lycos and Alta Vista. He developed a tool called Engage to sell data that aided early versions of targeted advertising on the web. But shares of CMGI topped at $199 in 1999 and fell to about $6 in 2000. CMGI later became ModusLink Global Solutions via a merger.
Now: Wetherell is on to biotech - the sector some now call bubbly. He is a managing partner at Biomark Capital in Greenwich, Connecticut, which provides venture capital to life-sciences companies aiming at Alzheimer’s, diabetes and genetics testing.
He is still bitter about former Federal Reserve chairman Alan Greenspan’s policies circa 2000, which he said he believes contributed to the big fall. “The market price-to-earnings ratios for the Nasdaq are far more reasonable than they were 15 years ago, and we have had a far more responsible Fed for the last decade, which, unlike Greenspan, did not raise interest rates six times in six months despite low inflation.” JULIE WAINWRIGHT: NO MORE SOCK PUPPETS, JUST LUXE WEAR
Then: Julie Wainwright was CEO of Pets.com, which became a well-worn example of the tech boom and bust. She raised $82 million when she took the company public in 2000. But later the same year, the company failed to raise a second round of funding and folded.
Now: In 2011, Wainwright founded the luxury resale and consignment website TheRealReal, which claimed $100 million in revenue last year with 3.5 million members - figures that are unverified independently as it is not a publicly held company.
She’s optimistic: “Investors are starting to look for unique business models again, something they didn’t do during the great financing desert between 2000 and 2010.”
Then: Taking early aim at social networking with chatrooms and cybergames, Stephan Paternot and a Cornell classmate co-founded TheGlobe.com in 1994. The pair raised nearly $1 billion after it debuted on the Nasdaq in 1998, and Paternot became infamous as a symbol of young hedonism when he was filmed in a nightclub saying “Got the girl. Got the money. Now I’m ready to live a disgusting, frivolous life.” By 2000, the company had become a penny stock and the founders were out.
Now: He’s tried to pass on the lessons learned. In 2012, Paternot posted a letter to Mark Zuckerberg on his Facebook page just before that company’s IPO. Innovate, Paternot said, but also be aware of the investors’ agendas.
In 2010, he co-founded Slated, a service that connects investors with film producers and creators. In 2014, investors using Slated sent $1 billion into the film industry and backed 65 percent of the films that won distribution deals at the Sundance Film Festival.
“Now, people understand the new internet economy they are investing in,” Paternot told Reuters. “Business models are more sophisticated and values are 20 times earnings, rather than 100 times earnings like it was in the bubble.” (Reporting by Jennifer Ablan and Heather Struck; additional reporting by Jennifer Saba; editing by Linda Stern and Nick Zieminski)