According to finance whiz Kunich, the dot-com bust was because Clinton
didn't try to stop investors from dumping cash into lousy IPOs.
http://www.thestreet.com/_tscrss/funds/investing/10341308.html
Fortress went public two weeks ago and doubled in price on the first
day. But what investors may not realize is that the five principals
pretty much stripped the company clean just before the IPO.
Total withdrawn in the two years before they took it public: $1.9
billion. Most of that was in the final few months.
This isn't just every penny that the company earned over that period
-- it's a lot more. By the time the owners opened the doors to the
investing public this month, the company wasn't just out of cash -- it
had negative book value. Liabilities actually exceeded assets by $507
million.
In other words, the owners didn't just clean out the vault. They left
a pile of IOUs -- and used the new money to balance the books.
When the overallotment is finally calculated, ordinary investors will
probably have put in $685 million.
Let's be clear. Edens and his partners have done nothing illegal.
Let's even go as far as saying they did nothing unethical.
They sold a stake in the company to the investing public on an "as is"
basis. And all this was disclosed in the prospectus.