Pump up the jam
During the wild and crazy days of the DotCom bubble, I worked for a digital music company in Silicon Valley - they were trying to be iTunes before Apple had thought of it. The company was due to have its "IPO" -- that is, going public on the stock exchange.

In the run-up to the IPO, we were all issued with credit cards, which had several hundred dollars per month loaded onto them, and told to go crazy buying music -- so that the figures looked good for potential buyers. Basically it was company-funded sockpuppeting!
(moon monkey is busy making memories worth repressing, Mon 11 Jul 2011, 15:21, 10 replies)

Wouldn't that expense have shown up in even the most half-arsed due dilligence?
I mean ... I know some silicon valley investors are fuckwits but christ ... you'll be telling us that Facebook is worth a bajillion dollars next.
( Dr. Shambolic je suis charlie, Mon 11 Jul 2011, 15:31, closed)

I don't pretend to understand the legalities of stock trading
especially not the American laws. But that's what happened, and the company successfully went public. We had a beach party and everything. So I guess you're wrong.
(moon monkey is busy making memories worth repressing, Mon 11 Jul 2011, 15:43, closed)

I don't think he's wrong
it's more likely the dumb idiots who wanted a slice of the company simply didn't bother to check.
(username failed moderation, Mon 11 Jul 2011, 15:53, closed)

I wasn't suggesting that isn't what happened.
I was suggesting that the investors in the dotcom bubble were even more stoopid than I previously imagined. IPOs usually involve bankers as middlemen and it's their job to make sure that the thing they're flogging is more-or-less what it says it is. If they didn't spot all these magical company credit cards spending money on the company's own product then they are (in technical financial jargon) fucking retards.
( Dr. Shambolic je suis charlie, Mon 11 Jul 2011, 16:10, closed)

I have no problem with that summary!
It was a crazy time. Money flowed like water (and evaporated even faster when it all went Pete Tong!)

Oh, and as it happens the company's core product (the music technology) was genuinely good.
(moon monkey is busy making memories worth repressing, Mon 11 Jul 2011, 16:18, closed)

^This^
I too surfed right on the cusp of the dot-com bubble - companies collapsed around me - I would join, be paid silly wages for ten minutes, then be made redundant as the last one in, to meet my colleagues in the same position within weeks.

One company went spectacularly bust, and I think that perhaps the fact that we all had a colour desktop printer each, were required to print emails for filing, and that they'd put a couple of grand behind the bar at the local each month for the "staff meeting" might have had something to do with it.

Crazy, awesome times.
( Je suis un vagabond is an unfunny, up your own arse middle class knob, Mon 11 Jul 2011, 16:53, closed)

Not the bankers,
the lawyers.

The offer document is supposed to paint a true image, but there's still a very big slice of 'caveat emptor' served up with the purchase. It's still pretty hard to presss home a claim for a dodgy prospectus. There are ways to spin the kind of shit the the poster descirbed. It's still up to the buyer to reinterpret the bullshit.
(username failed moderation, Tue 12 Jul 2011, 9:24, closed)

As if the bankers are going to do anything which reduces their fees...
If you fancy giggling over some more dubious financial goings-on, have a look at some recent issues of Private Eye. They've been reporting on the impending IPO of an outfit called Glencore. To hear the Eye tell it, all the bankers have their snouts well and truly in the trough, so the amount of due diligence being carried out is allegedly questionable at best.
( flake has nothing against your right leg, Tue 12 Jul 2011, 13:55, closed)

To a point, Lord Copper
Although the Eye performs a useful service, it's a long way from being a reliable source of fact. While bankers in an IPO are fundamentally motivated by their fee, and anyone who fails to realise that when reading IPO material is a gibbering idiot, they're unlikely to try illegal stuff as policy. Why bother, when you can make enormous fortunes without the chance of jail?

Bankers who do *proveably* criminal things are usually junior-ish, acting solely in their own interests, and often trying to cover up a disastrous fuckup (like Nick Leeson). If you're senior and rich, then you know how not to be proveably criminal.
(stalinism, Thu 14 Jul 2011, 10:52, closed)

I'd bet a fair amount of money...
...that the credit card bills were being paid by the founders, not by the company. So it wouldn't have showed up in the company's accounts or legal department. And the money the founders made from IPO would more than happily pay off the credit cards.
(stalinism, Thu 14 Jul 2011, 10:26, closed)