Buy, Lie, and Sell High: How Investors Lost Out on Enron and the Internet Bubble

Who Brought Those Duds to Market?

In an article entitled “Just Who Brought Those Duds to Market?” The New York Times wrote:

… many Wall Street investment banks, from top-tier firms like Goldman Sachs … to newer entrants like Thomas Weisel Partners … have reason to blush… Of course, investment banks that took these under-performing companies public may not care. They bagged enormous fees, a total of more than $600 million directly related to initial public offerings involving just the companies whose stocks are now under $1.

… How did investment banks, paid for their expert advice, pick such lemons?^[59]

Part of the answer is that investment banks seem to have assigned dot-coms to analysts who specialized in technology companies. But as we've ...