There is apparently some juicy stuff in the new book “Blood on the Streets” by Newsweek writer Charles Gasparino. According to a Newsweek press release, the book “details the rise and fall of three high-profile Wall Street analysts — Merrill Lynch’s Henry Blodget, Morgan Stanley’s Mary Meeker and Salomon Smith Barney’s Jack Grubman”.
Newsweek has an excerpt this week, albeit one which covers entertaining (Grubman) territory we have mostly visited before. This snippet concerns Grubman’s phony change-of-heart on AT&T as he apparently swapped a higher rating on the stock for getting his kids into a better school:
[Analyst Jack] Grubman and [Citigroup CEO Sandy] Weill weren’t very close, but by late 1999, they were communicating daily as Grubman took his “fresh look” at AT&T. It didn’t take long for Grubman to come up with a solution to make everybody happy. In a two-page memo titled, “AT&T and the 92nd Street Y,” Grubman reminded Weill of his “very productive” meetings with AT&T’s top executives. But Grubman said he needed to elaborate on the “ridiculous but necessary process of preschool applications in Manhattan.” Grubman needed Weill’s help. “The 92nd Street Y is, without question, the one we’d love our children to attend.” Grubman even attached a list of Y board members for Weill to call. Weill didn’t wait long to fulfill his end of the bargain, and made a proposal: a donation of $1 million if the Grubman kids were admitted. The school was receptive, and Grubman became more receptive to AT&T’s business model. On Nov. 29, Grubman announced to Salomon brokers that with AT&T’s new cable strategy, there was no telling how far the stock could climb. The market agreed. Shares of AT&T spiked.
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