Quattrone's quandary: How to top 1999

By Om Malik

December 27, 1999

Which is the top underwriter for 1999? No, it is not Goldman Sachs or BancBoston Robertson Stephens. Surprisingly, Credit Suisse First Boston is the winner of the 1999 initial public offering (IPO) sweepstakes. And much of the credit goes to Frank Quattrone, head of technology investment banking at Credit Suisse First Boston and a former Morgan Stanley banker.

By the end of the third quarter of 1999, Quattrone helped boost First Boston to No. 5 in stock underwriting from No. 8 in 1998, according to Thomson Financial Securities Data.

Since then CSFB has improved its position even further.

So far the bank has underwritten 60 offerings, showing a 342% gain, according to IPO.com, a research service tracking the IPO offering. In comparison, Goldman Sachs has managed 54 offerings, while Morgan Stanley Dean Witter weighs in with 52 IPOs. Robertson Stephens came in fourth with 46 IPOs, as of Dec. 23, IPO.com reported.

What's more impressive is the number of home runs racked up by Quattrone's team. CSFB winners this year include Commerce One cmrc (nasdaq: cmrc), up 2,748% from its offering price of $21 on July 1. Another recent winner, VA Linux Systems lnux (nasdaq: lnux), doesn't even make it to the CSFB top ten list. It is ranked at No. 11 with a mere 563% gain from its IPO price of $30 per share.

Other winners for Quattrone & Co. include Liberate Technologies lbrt (nasdaq: lbrt), Phone.com phcm (nasdaq: phcm), E.piphany epny (nasdaq: epny), Vitria Technology vitr (nasdaq: vitr)and Allaire allr (nasdaq: allr).

If his group's performance for 1999 is any indication, then this is the first time Quattrone has been able to show off his investment banking muscle ever since he left Morgan Stanley Dean Witter in 1996.

Son of a South Philadelphia clothing factory worker, 43-year-old Quattrone joined Morgan Stanley in 1977 after graduating from Wharton. Two years later he left the firm to get a business degree from Stanford and rejoined Morgan Stanley two years later. He rose to the top of the technology group and pulled off a coup when he got the all-important Netscape Communications deal for the firm.

A very public spat with the Morgan management in 1996 on the issue of Morgan's technology group's compensation, head count and control, Quattrone quit the bank along with colleagues George Boutros and Bill Bradley.

The trio joined Deutsche Morgan Grenfell (DMG), the securities unit of Germany's Deutsche Bank, where he brought home the all-important Amazon.com amzn (nasdaq: amzn) deal. Another compensation-related spat caused him leave for more lucrative shores, namely CSFB.

And if his performance this year is any indication, then Quattrone is worth his weight in gold. The big question is, however, how will he top 1999?

CS First Boston Scorecard

Name Offer date Offer price Close price on Dec. 24 % change
Commerce One July 1 $21.00 $598.00 +2,747.6%
Liberate Technologies July 28 16.00 244.25 +1,426.5
E.piphany Sept. 22 16.00 242.50 +1,415.6
Vitria Technology Sept. 17 16.00 231.00 +1,343.7
Silknet Software May 5 15.00 138.00 +820.0
Interwoven Oct. 8 17.00 145.750 +757.3
Phone.com June 11 16.00 118.25 +639.0
InterTrust Technologies Oct. 27 18.00 124.19 +589.9
Tumbleweed Software Aug. 6 12.00 82.50 +587.5
Allaire Jan. 22 20.00 136.75 +583.7
VA Linux Systems Dec. 9 30.00 199.00 +563.3
Software.com June 24 15.00 96.47 +543.1
Netcentives Oct. 14 12.00 69.13 +476.0
Silicon Image Oct. 6 12.00 68.38 +469.7
Razorfish April 27 16.00 90.00 +462.5
Informatica April 29 16.00 88.63 +453.9
Efficient Networks July 15 15.00 71.25 +375.0
Clarent July 1 15.00 71.00 +373.3
NetIQ July 30 13.00 57.50 +342.3
Radio One May 6 24.00 88.50 +268.7

Source: IPOMonitor.com Source: IPOMonitor.com

1999 Forbes.com™