It was the beginning of the dot-com bubble years and on Friday, November 13, 1998 the Globe.com IPO’d. It was the 48th IPO in the internet space that year, basically the peak of the dot-com bubble.
Lead underwriters Bear Stearns and Volpe Brown Whelan managed the IPO, good for insiders, good for them, but bad for the owners and the street. Bear Stearns and Volpe Brown Whelan split over $1,778,000 in fees. Shares were allocated at $9 a share to friends and family such as Miami Dolphins coach Jimmy Johnson and his girlfriend Rhonda Rookmaaker received 2,000 shares apiece, Dolphins owner H. Wayne Huizenga was a TGLO director and important clients of Bear Stearns and Volpe Brown Whelan.
The stock opened at $90 and went up to a price of $97 before falling back to close at $63.50 per share. Rhonda Rookmaaker and Jimmy Johnson sold out at $87 per share, a massive 10x gain and some Bear Stearns and Volpe Brown Whelan clients also made a one day gain of 1,000%.
The stock’s 606% first day increase is still the record holder, over 15 years later. 3.1 million shares were traded that day, for a total of $27.9 million. The company’s market capitalization value was over $840 million making Paternot and Krizelman each worth over $100 million (on paper).
Unfortunately for the 93 staff of theglobe.com they were required to wait six months before selling.