One IPO 'Spin' That Didn't Take Place

Did some company founders steer IPOs to certain investment banks in return for kickbacks, hot stock that was put into their personal accounts? I am sure that some executives couldn't resist and took the lucre, just as the House Committee suggested with its release of the "spun" IPO lists from Salomon Smith Barney and now Goldman Sachs(GS). I know the implication of the release of the Goldman Sachs IPO clients list is that clients of Goldman picked Goldman for IPO work because they could get kickbacks of other IPOs personally. No doubt, some executives faced with a plethora of bankers decided to select a banker for the lucrative IPO work based on how much they could benefit personally.

But I also am sure that one of the companies mentioned, TheStreet.com(TSCM), didn't, and it does make me feel the whole inquiry has gotten a bit bizarre, to say the least.

The story of how we picked Goldman Sachs is well-chronicled in my autobiography, Confessions of a Street Addict. I insisted, against the wishes of the CEO at the time, that the business be done with Goldman Sachs. The former CEO argued vociferously that the business should be done with Morgan Stanley, which also was bidding for our deal. I said that because I had worked at Goldman -- had gotten my start there -- the business deserved to go to Goldman. I had no personal account and was not permitted to accept any hot shares of IPOs, so my choice had nothing to do with "spinning." Oddly, Marty Peretz, the co-founder of TheStreet.com, championed First Boston as the underwriter, asking me to sit down with the people in charge of syndicate there. I did so, but decided that it wasn't for us.

In a heated discussion at the board level, I prevailed, and the business went to Goldman.

Now, I pick up the paper and read a story that implies we went with Goldman because of a personal account Marty had there.