A random Walk Down Wall Street: The Time-Tested Strategy for Successful Investing

TheGlobe.com
My most vivid memory of the IPO boom dates back to an
early morning in November 1998, when I was being
interviewed on a TV show. While waiting in my suit and tie
in the “green room,” I thought how out of place it was to be
sitting next to two young men dressed in jeans who, while in
their early twenties, looked like teenagers. Little did I realize
that they were the first superstars of the Internet boom and
the featured attractions on the show. Stephan Paternot and
Todd Krizelman had formed TheGlobe.com in Todd’s dorm
room at Cornell. The company was an online message board
system that hoped to generate large revenues from selling
banner advertising. In earlier times, one needed actual
revenues and profits to come to market with an IPO.
TheGlobe.com had neither. Nevertheless, their bankers,
Credit Suisse First Boston, brought them to market at a price
of $9 per share. The price immediately soared to $97, at that
time the largest first-day gain in history, giving the company

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a market value of nearly $1 billion and making the two
founders multimillionaires. That day we learned that
investors would throw money at businesses that only five
years before would not have passed normal due diligence
hurdles.
The initial public offering of TheGlobe.com was the
catalyst that launched the pathological phase of the Internet
bubble. The relationship between profits and share price had
been severed, and a wave of money-losing ventures rushed to
the market with IPOs. As for Paternot, a CNN segment in
1999 caught him at a trendy New York nightclub dancing on a
table, in shiny plastic black pants, with his trophy model
girlfriend. On camera Paternot was heard to say, “Got the
girl, got the money. Now I’m ready to live a disgusting,
frivolous life.” Paternot and Krizelman became known as the
“global poster boys of Internet excess.” TheGlobe.com closed
its Web site in 2001. And though Paternot may no longer be
living a “disgusting” life, in 2010, he was serving as executive
producer of the independent film 
Down and Dirty Pictures
.
While the party was still going strong in early 2000, John
Doerr, a leading venture capitalist with the preeminent firm of
Kleiner Perkins, called the rise in Internet-related stocks “the

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greatest legal creation of wealth in the history of the planet.”
In 2002, he neglected to write that it was also the greatest
legal destruction of wealth on the planet.

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