Second Acts in Finance: The 5 Most Astonishing Comeback Stories
By Justin Sharon Jan 11, 2013 12:00 pm
Tales of the previously powerful being brought down to earth with a thud only to rise again, are irresistible. Here, a "fierce five" of corporate American comebacks.
Blodget, blasted for issuing misleading reports "for which there was no reasonable basis" over a two-year period, was subsequently banished, much like Milken, from the securities industry for life. A $4 million fine followed -- his annual salary was estimated at $12 million -- although it was absent any outright admission or denial of guilt. In November 2001, with smoldering rubble from the terrorist attacks of two months earlier still visible from his office across the street, the analyst opted, like many on Wall Street at that troubled time, to reassess what was ultimately important. He accepted a buyout package on offer, adding in classic 'second acts' style, "It just seemed like a good time to pursue the next thing." (Full disclosure: During this period I worked in the equity research unit that served as a liaison between stock analysts and Merrill's 15,000 strong army of financial advisors, many of whom fielded furious inquiries from irate clients as the dot-com era came crashing down. These calls were quickly transferred over to us, and for a spell it seemed as if our department's sole purpose was to play the role of a fire hydrant at a dog convention. Yet personally I always found Henry nothing but nice. Indeed he made a point of sending us all a bottle of wine for Christmas 2000, along with a note saying, "Sorry for all the trouble I've caused you guys this year." Interestingly, his holiday gift to clients in 1998 was Extraordinary Popular Delusions and the Madness of Crowds by Charles Mackay, suggesting that the analyst was well aware we were witnessing nothing more than another one of Mr. Market's periodic bouts of tulip mania.)
Feeling, in his formulation, like a "global piñata," Blodget mulled the next step. As it happened, the following chapter involved writing a book, The Wall Street Self-defense Manual in 2007, before eventually co-founding the influential financial website Business Insider, where he is currently CEO and Editor-in-Chief. The product, while too tabloid for some tastes, has quickly become an indispensible read for many in the industry, and both its revenue and roster of upscale advertisers continue to increase apace. The years since the scandal broke have been kind to Henry Blodget. Being banned from the securities industry for all time hasn't stopped him from becoming an unlikely Salvation Army of sorts for the NYSE, ringing bells there to officially begin proceedings in both 2011 and 2012. This one time poster child for all Internet excess now finds himself frequently wheeled out as an experienced voice of reason on CNBC, sagely offering advice to a new generation of investors. Occasionally, as when hailing Mark Zuckerberg as an "improbably brilliant CEO" in a New York magazine cover article only four days before a spectacularly botched IPO indicated otherwise, he can still stand accused of being a cheerleader for money-losing web ventures. Yet accumulating evidence indicates that Blodget is hardly alone here and, fully a decade on, the jury is decidedly still out on Eliot Spitzer's attempt to reign in overly rosy research recommendations.
Ah, Eliot. Ironically, just as Mike Milken and his earlier arch nemesis Rudy Giuliani subsequently became the strangest of bedfellows in their second act, so have Henry Blodget and the man who once attempted to end his career since kissed and made up. "I really thought he was on course to being president of the United States," Blodget told Bloomberg, although any such ambitions abruptly ended after the prosecutor's dalliance with a prostitute as the notorious 'Client Number 9.' For his part, Spitzer cooed in an interview with the same publication,"Listen, I think Henry's great." Indeed in 2009 the two men even came together for a remarkably cozy breeze-shooting session, a confab characterized by Gawker as 'Blodget v. Spitzer: Disgraced Rich White Men Sit Down for a Chat.'
Cynics may say Henry Blodget's second act as a financial journalist is ultimately just an extension of what he always was. That the onetime proofreader for Harper's magazine, armed only with a humanities degree, literally had no business dispensing business advice, and merely rode one of Wall Street's historic waves. Others see his resurgence as an inspiration. Either way, it makes for a fascinating narrative, and the final few exciting chapters are still to be written.
No positions in stocks mentioned.
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