The Merrill Lynch tips under investigation

By This Is Money
Updated: 18:00 EST, 13 April 2002

 

NEW York State Attorney General Elikot Spitzer has accused Merrill Lynch of giving misleading share advice to win fat corporate fees during the dotcom boom. These are the tips under investigation:

• Pets.com: Online shop for pet owners. Taken public by Merrill in 2000, folded at end of year. Blodget tipped stock, issuing buy note and downgrading to 'accumulate' in August, just months before it collapsed.

• Quokka Sports: Showing sporting events through internet. Merrill took it to market in July 1999, filed for bankruptcy April 2000.

• Webvan: Internet grocer raised $264m of venture capital money. Founder Louis Borders of Borders bookstores said: 'It's going to be worth $10bn - or zero.' Floated by Goldman Sachs in November 2000, collapsed following summer having burned through $1bn.

• iVillage: Aimed at women, floated in March 1999. Lawsuit filed last year against underwriters alleging prospectus was materially misleading. iVillage.co.uk, formed in partnership with Tesco.com, still going.

• Buy.com: Internet shopping site floated February 2000, raising $182m. Later posted poor results, suffered high-level departures, closed UK operations and pared back ranges. Delisted from Nasdaq, bought back by founder Scott Blum for $23m in August 2001. Company and several banks face shareholders' lawsuit.

• 24/7 Media: Advises online marketers and publishers. Floated by Merrill in 1998. Rated by Blodget as 'long-term accumulate'. Still going, but subject of class-action lawsuits.

• E-Toys: Flagship toy retailer. Filed for bankruptcy March 2001 with debts of about $300m. Underwriters, including Merrill, being sued. Strongly recommended by Blodget.

• Internet Capital Group: Software and services company, still operating. In December 1999, stock hit $212. Ten months later it was $12.38. Blodget e-mailed another internet analyst with prediction that stock was going to $5. Merrill's public rating? 'Accumulate'.