Let's say you're a boat builder. You've built a beautiful boat. It's called the SS Carbonite. It took years, but it's finally done. You've planned the launch for months, and both you and the person who bought the boat are excited to set it afloat. But on launch day, a storm blows in. The wind is whipping, the sea roiling. Only the crazy storm-watchers are out at the docks. Your boat is sea-worthy, but to launch in these conditions will be tricky and dangerous. What do you do?
If you built Carbonite, the online backup company that filed its IPO papers back in May, you launch anyway.
Congratulations, you've just turned what should have been an exciting celebration into a ghoulish spectacle. The few people not huddled indoors waiting for the storm to pass watch your launch. It doesn't sink! But it does take on some water.
Carbonite (Nasdaq:CARB), which went public today, initially expected to raise $122 million in its IPO, raised instead just $62.5 million. And that was in part because it launched into the middle of a hurricane.
As Don Reisinger reported earlier, Carbonite CEO David Friend says, "I'm not so concerned about the stock price today. I'm more concerned what the stock price will be a year or two years from now."
I'll grant that it's the job of a public-company CEO to maximize stock price for his shareholders, but until the moment the company went public, his job was to maximize return for his earlier-stage investors. And at that, he appears to have cost early investors 50 percent of their projected returns. … Read more