Gawker: valleywag, credit suisse

Credit Suisse Bankers to Eat Toxic Cake They Baked

Owen Thomas — Thu, 18 Dec 2008 15:32:39 EST

Justice so sweet, you can taste it: Instead of cash or stock, bankers at Credit Suisse will get their bonuses in the form of the devalued mortgage bonds they helped peddle.

Reporters for Reuters got their hands on a memo from Credit Suisse CEO Brady Dougan and Paul Calello, head of its investment-banking arm. They wrote to 2,000 investment bankers:

While the solution we have come up with may not be ideal for everyone, we believe it strikes the appropriate balance among the interests of our employees, shareholders and regulators and helps position us well for 2009.

It's wickedly brilliant. Credit Suisse takes $5 billion in questionable assets off its books, which immediately benefits shareholders. Publicly, it looks like the bankers are being punished with the toxic junk they made a fortune selling, which satisfies regulators and a bloodthirsty public.

And in reality? The bankers are getting bonds, derivatives, and other instruments whose value has already been discounted by 35 percent — a loss borne by Credit Suisse investors. If they rebound, Credit Suisse's moneymen will end up getting more than $5 billion. But that scenario assumes that the credit markets unfreeze and housing prices recover — at which point no one will be calling for guillotines on the streets of lower Manhattan. Wall Street always finds a way.

(Photo by Founditemclothing.com)

Frank Quattrone's rebound relationships

Owen Thomas — Tue, 18 Mar 2008 20:40:07 EDT

Having cleared his name of obstruction-of-justice charges, former Credit Suisse tech investment banker Frank Quattrone is launching his own boutique firm, Qatalyst Partners. Several big Valley names volunteered quotes for the press release. It's not surprising that Google CEO Eric Schmidt, who's made his own moral missteps, would be forgiving of Quattrone. But Gideon Yu, Facebook's CFO, makes a more curious appearance. He gave a statement applauding Quattrone's partner Jonathan Turner, not Quattrone himself. But still, it amounts to an endorsement. Does Yu really think Quattrone did nothing wrong? Or, as a minister's son, is he just expressing the highest form of the Valley's belief in the power of redemption?

Glam Media raising a round — but far less than it hoped for

Owen Thomas — Thu, 31 Jan 2008 14:59:27 EST

Samir Arora, the Valley's most talented flim-flam artist, has convinced investors to put in a fresh round of financing into Glam Media, his online-ad network. The deal could be announced as soon as tomorrow. The amount raised: Between $30 million and $100 million, we hear, valuing the company at as much as $400 million. A lofty figure, given Glam's scant sales — but Arora had sought a $200 million round, and a valuation in the range of $800 million to $1 billion. The premise of that valuation: The 25 million monthly visitors to sites in Glam's network, many of them female. But investors likely figured out that Glam doesn't own most of the sites those people visited.

The diminished financing must be a disappointment to Arora. But it also could be a comedown for the crowded ranks of investment bankers working the deal: Allen & Co., Bank of America, Credit Suisse, and Deutsche Bank are all involved, we hear. Split four ways, the commission on the shrunken deal likely won't pay many bonuses. (Note: Glam represents some sites which compete with Jezebel, a women's blog published, like Valleywag, by Gawker Media.)