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TRUE MEMBERS OF THE TRIBE: INDIANS IPO FAILS TO CATCH FIRE
Published June 5, 1998
The Indians' "opening pitch on the stock market was a little low and outside," but Owner Richard Jacobs raised $60 million and "declared it a hit," according to Bill Lubinger of the Cleveland PLAIN DEALER. The shares closed the day's trading "at a lackluster" $14.75, down $.25 a share from the offering price with 1.5 million shares trading hands. On the price drop, Jacobs said, "Oh, that happens, for goodness' sake. A lot of people buy the stock to flip it" (PLAIN DEALER, 6/5). In Akron, Mary Vanac reports the IPO raised $55.8M and "as expected, the real interest in the shares came from area residents" (BEACON JOURNAL, 6/5). SWING AND A MISS? CNN's Jan Hopkins reported that the Indians' IPO "came in dead last [Thursday] on Wall Street" among yesterday's debut stocks. Hopkins: "That investor shutout should come as little surprise to anyone who follows the IPO market. History shows that stock and sports are not usually a winning combination" ("Moneyline," CNN, 6/4). In N.Y., Aaron Lucchetti reports that while a "one-day loss doesn't ruin the whole season, giving up ground on the first day after an IPO is unusual. The average company going public this year has gained 16% on its first day of trading." IPO Reporter's John Fitzgibbons: "They struck out." But Lucchetti writes that whether the Indians' investors "really care about the stock market is debatable" (WALL STREET JOURNAL, 6/5). Also in N.Y., Peter Grant reports that investors "were concerned about warnings that the company has very limited growth potential." But he adds that Jacobs' success "will encourage" other team owners to explore IPOs. The Bonham Group Chair Dean Bonham: "It unquestionably was a home run for Jacobs" (N.Y. DAILY NEWS, 6/5). In S.F., Mark Veverka writes that while the IPO "wasn't exactly a home run for shareholders," Jacobs was the "real winner" (S.F. CHRONICLE, 6/5). Header of BLOOMBERG NEWS story in the N.Y. POST: "Cleveland IPO A Swing And A Miss." Bonham: "From an investment standpoint, on a scale from 1 to 10, this is a 2" (N.Y. POST, 6/5). CNBC's Scott Cohn said the reason for the drop in Indians' shares is that MLB is "a lousy business. The sport still hasn't recovered from the players strike four years ago, so this would be an investment for love" ("The Edge," CNBC, 6/4). SALARIES: USA TODAY's Hal Bodley notes the Indians' prospectus with the SEC lists the following salaries: Jacobs at $700,000; GM John Hart at $600,000; Exec VP Dennis Lehman and Assistant GM Dan O'Dowd at $300,000 and Marketing VP Jeff Overton at $225,000 (USA TODAY, 6/5).