Author Archives: Michael Froomkin

Venturpreneur Throws Cold Water on Google IPO

Posted on April 30, 2004 by Michael Froomkin

The Venturpreneur is an interesting blog I stumbled on last week. Now I discover that the author is Gordon Smith, someone I met in Tilburg, the Netherlands (not as strange a place as it may sound for two Americans to meet — Tilburg, along with Amsterdam, is an Internet studies powerhouse).

Gordon is now a law professor at Wisconsin, and he's writting some provocative comments today about the new Google IPO:

The Growth Story: Selling stock in an IPO is not about convincing people that your present performance is stellar. It is about your growth story. People who invest in IPO shares are hoping that your company will become the next Microsoft. A compelling vision is crucial. I have been reading the prospectus for clues about Google's growth story, and this is what I have found.

…

Bottom line: The prospectus is worse than I imagined it could be. I assumed Google would have a difficult time telling a growth story, but I thought that they would give it the old college try. Instead, their growth story is nothing more than a celebration of past accomplishments. “Don't you just love our search technology?!”

Yahoo is currently trading at a price/earnings ratio of approximately 125. Google is currently less efficient at servicing the bottom line, and it admits that operating margins will decline. In the face of these realities, it will need to achieve a price/earnings ratio higher than Yahoo's to obtain the kind of valuations projected over the last few days. While it may reach such lofty heights if retail investors get overly enthusiastic, those prices are not sustainable under any scenario contemplated in the prospectus.

I hope this is pessimistic, although it certainly seems right as far as I can tell. I'd like the first major IPO which is run on a pure public auction, without huge margins to the parasites investment banks, to be a stunning success.

Update: John Battele's take on the IPO

Posted in Econ & Money | 2 Comments

A Good Start on our British Problem

Posted on April 29, 2004 by Michael Froomkin

It's good to know that those alert authorities at JFK are taking no chances with dangerous visiting British accountants. You never know what they might do in New York — maybe go shopping and reduce the trade deficit a little.

Briton 'in chains at JFK airport over bogus debt' (UK Telegraph, reg. required): An accountant claims that he was kept for more than 24 hours in “leg chains” and denied food and water after flying into New York's JFK airport with his wife.

David Pattison, 52, of Beeston, Norfolk, was held by US security officials because an Interpol notice alleged that he was wanted in Qatar for debts of up to $10,000 (£5,800).

He was deported on Monday night without having been allowed to enter America.

Mr Pattison, who disputes the alleged debt, said he was subjected to “inhumane and degrading” treatment by the US authorities and a “lack of assistance” by the Foreign Office.

He arrived at the airport's immigration control on Sunday afternoon, at what was to have been the start of a two-week holiday with his wife, Janice, 49, the mother of their six children.

There he was told of the Interpol notice. Mr Pattison worked for an oil company in the Gulf state in 1999 but denies that he left behind any debts. Although about $5,000 (£2,900) had been outstanding on a car he used for work, this was settled after the agreed sale of the vehicle in 2000.

“This was the first I had heard of any warrant against me, and I have travelled all over Europe since 1999,” said Mr Pattison.

“I told the US officials I had a letter at home to prove all matters in Qatar had been settled but they were not interested.”

Mr Pattison was then told he would not be allowed into the country and would be deported. “I requested a call to the British consulate in New York and I spoke to a man who refused to give his surname. He said he couldn't help because I hadn't been admitted to the country and I was in limbo.

“But that is exactly when British subjects in a situation such as mine need assistance. God knows what it would have been like had we been travelling with our children.”

Mr Pattison claims his wife was then escorted out of the room in tears and left to fend for herself. He said cuffs were placed on his hands and ankles and that a wooden restraint was put across his chest.

“I was escorted to a facility with no food or drink and my angina medication was locked away from me. I was placed with eight other unfortunates, two of whom were also British, but we weren't allowed to speak to each other.

“We begged for water but the [Department for Homeland Security] staff just sat there eating hamburgers. There was nowhere to wash or sleep and I observed verbal abuse by US immigration personnel to most of these people.”

It's especially important to be tough on Britons as we would not want them to think that their government's supporting the Administration in Iraq should give them any right to the decent treatment we deny to foreigners from other countries. And you certainly wouldn't want to let in people with debts, especially not big debts like up to $10,000. Especially not an accountant who racked up debts like that. Why, it's not as if Americans were ever in debt!

It's also important to discourage tourism to New York, as there will soon be a Republican convention there and we'll need all the hotel rooms and lots of space for drunken parties on the streets.

Oddly, the government of Quatar claimed to have no knowledge of the warrant for Mr. Patterson, but they're from the Middle East, so why believe them?

Posted in Civil Liberties | 1 Comment

More American Censorship (Patriot Act Dept.)

Posted on April 29, 2004 by Michael Froomkin

No, it's not a typo: Patriot Act Suppresses News Of Challenge to Patriot Act:

“It is remarkable that a gag provision in the Patriot Act kept the public in the dark about the mere fact that a constitutional challenge had been filed in court,” Ann Beeson, the ACLU's associate legal director, said in a statement. “President Bush can talk about extending the life of the Patriot Act, but the ACLU is still gagged from discussing details of our challenge to it.”

Yes, it's still a free country. Just not as free as last year. (spotted via boingboing)

Posted in Civil Liberties | Comments Off on More American Censorship (Patriot Act Dept.)

Censorship American Style

Posted on April 29, 2004 by Michael Froomkin

David Farber writes to the Interesting People list,

I gather that there is a report that Sinclair Broadcast ordered its ABC affiliates to preempt tomorrow's broadcast of Nightline which will air the names and photos of U.S. military personnel who have died in combat in Iraq, saying the move is politically motivated designed to undermine the efforts of the US in Iraq.

Sinclair owns 62 US TV stations.

And so there is.

Is it legal? Probably — we impose only the loosest public interest requirements on the beneficiaries of the publicly created broadcast oligopoly, and what little I know of broadcast law this doesn't come close to violating it.

Is it in good taste? I think reasonable people might differ about the good taste involved in refusing to broadcast the show, especially if those people didn't see it as honoring the dead. (Not my view at all, but people differ.) I do think that accusing ABC (of all bodies!) of what amounts to treason (in effect the old accusing them of giving aid and comfort to the enemy) is not only not in good taste, but contemptible.

Are we not allowed to talk about the costs of this war project? Especially as the goals diminish from a free and democratic Middle East, to a free Iraq, to less violence, to getting out without humiliation?

Apparently not on Sinclair stations.

Posted in Politics: US | Comments Off on Censorship American Style

Florida Is a Bloghaven?

Posted on April 29, 2004 by Michael Froomkin

This is surprising:

=< Halavais: News>=: Where have all the bloggers gone? Well, basically the places you would expect. Lots in Boston, lots in Austin, lots on the coast, and a surprising dispersal in Florida (?)

See the cool map too (albeit only for blogs hosted by Livejournal and Diaryland).

Posted in Blogs, Florida | 2 Comments

When Judicial Nominees Tell Porky Pies

Posted on April 28, 2004 by Michael Froomkin

If he said what is reported at Bush Aide on Court Nominees Faces Fire as Nominee Himself, Brett Kavanaugh as much as perjured himself yesterday in front of a Senate committee when he stated that the White House had no ideological considerations in choosing judicial nominees. That obviously isn't true of this administration, just as it hasn't been true of many in my adult life (the exception that comes to mind is Jerry Ford, who seemed to care more about party affiliation than ideology per se).

I look forward to the same forces who explained, with some justice, that a person who lied to a grand jury was a poor choice to be President, now coming forward and explaining that a person who tells transparent porky pies to the Senate is unfit to be a DC circuit judge. (He's sorta young too. Judicial temperment, especially for federal appellate judges, does seem to tend to be a function of a certain age and experience much more often than not.) But I'm not holding my breath. Well worth a fillibuster. And I don't care how nice he is, how smart he is, or that he went to the right law school.

Posted in Law: Ethics | Comments Off on When Judicial Nominees Tell Porky Pies