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Tuesday, October 05, 2010

Ohio Gov. Candidate John Kasich Says He Brought Google To Wall Street: Maybe He Was a 'Little Shriveled Walnut' On the IPO

Walnuts or Wall Street?
CINCINNATI (TDB) -- GOP candidate John Kasich holds a shriveling lead in the race for Ohio governor, and he also may lead in giving himself a pat on the back for putting Google on the NASDAQ stock market.  But a former Google exec who oversaw the company's initial public offering calls the big Wall Street firms where Kasich worked "little shriveled walnuts"  who didn't truly comprehend the technology industry.  She contends Wall Street's hunger for fees and profits left growth companies SOL.  Google became a public company in August 2004.  A team of 21 investment banks, including now defunct Lehman Bros., where Kasich worked as a managing director, helped prepare Google's initial public offering.  Although Kasich does not mention his Wall Street ties in his official campaign biography, Kasich did say in the Sept. 14 debate with Democratic Gov. Ted Strickland that he had a hand in Google's success.  A link to a tape of the debate is available here. The Daily Bellwether found Kasich talking about Google at the 21:48 mark:

"I was part of the team that took Google public. We know what Google means."

Yes, we all know what Google means.  What we don't  know is what Kasich means.  Does he mean he was an important investment banker at Lehman Bros., the Wall Street company whose collapse in September 2008 helped pull down the U.S. economy?  Did he mean he was a player?  There is just not much information available about Kasich's role.  We do know that Lise Buyer was the investment banking guru at Google who was charged with taking the company public. She would have known Lehman Bros. and Kasich's role. I've not been able to contact her, but I do know she has a low opinion of the investment banks, and said firms like Lehman "emulated Audrey, the man-eating plant from 'Little Shop of Horrors,' demanding ever larger revenues to sustain their mass . . ."

Here's what Lise Buyer said about the investment banks on Feb. 9, 2009 in a column for All Things Digital:

"2. The demise of investment banks is good for IPOs. Today, we lambast investment banks because they earned it. Formerly sure-footed firms ran full speed into a bog they didn’t understand. Those whom Tom Wolfe once christened “Masters of the Universe” and “BSDs” have morphed into LSWs (little shriveled walnuts).

"How does this help the IPO market? In the heyday, technology IPOs were shepherded by boutique investment banks focused on, and economically aligned with emerging growth companies. Those banks didn’t invent, sell or swap CDOs or SIVs. Rather, in the 1990s, following the wisdom of the day, they sold out to diversified, theoretically better-capitalized, larger banks. Those acquiring banks emulated Audrey, the man-eating plant from “Little Shop of Horrors,” demanding ever larger revenues to sustain their mass, leaving new issuers who generate small fees with little IPOs, an acronym of their own; SOL.

"Now, with large investment banks hanging with the pterodactyls, there’s an opportunity for boutiques to rise again, a turn that could be very good for the IPO market."

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