Jack Grubman, fashion victim. The high-profile analyst has been many things during the well-chronicled rise and fall of the telecom industry. Now, he's merely another fallen icon from a bygone age in the investing world. But industry observers say his ouster from Salomon Smith Barney speaks more to the shifting winds of a struggling industry than it does to the questionable practices of an extremely well connected investment salesman. Grubman was certainly the right man at the right time for telecom enthusiasts riding his advice on the way up the late '90s bubble. Today, perhaps deservedly, he has become the magnet for a backlash in investor sentiment and late-to-the-draw political posturing. He is now but a villain in the give-me-the-head-of-a-sleazeball movie now playing on Wall Street, say analysts and investors. "Many folks who are concerned about all troubles in the market will look at Jack as a symbol of what went wrong and find him a suitable target," says Bob Wilkes, a retired telecom analyst with Brown Brothers and former peer of Grubman's. "Given the fact that he was open about the conflicts between research and banking and the fact that he said he could manage that role, it now makes sense that he's a target for reformers to go after."
failed Metromedia Fiber, coincidentally an outfit backed by Salomon parent Citigroup ( C). It wasn't until Metromedia's stock was closing in on $1 that Grubman dropped his buy rating. And though Grubman became somewhat of a punch line to the industry's downward spiraling joke, investors still studied between the lines of his sales pitches, looking for some of the data or catalysts he may have been privy to as he straddled the banker/analyst role. But before he developed intimate ties to top telco management, Grubman was best known as champion of the upstarts. In the late 80's, while at PaineWebber, Grubman was an early proponent of a risky business model that called for heavy financing and aggressive building and acquisitions to challenge the market dominance of AT&T ( T).