All Dressed Up and No IPO
At a time when the market couldn't invest in IPOs fast enough, scores of companies tried to go public and failed--with some disastrous consequences
If it hadn't been for the stress of the IPO falling through, I don't know whether I'd have had that heart attack," says David CotÉ, reflecting on the experience that nearly killed his company--and, he thinks, might have nearly killed him.
It's been about a year since his software company, Young Minds Inc., based in Redlands, Calif., was forced to scuttle its initial public offering, through which the perennially cash-strapped company had hoped to raise $13.2 million. The deal's failure was traumatic enough, but the ensuing fallout has been a veritable shop of horrors.
"We were out of money for almost four months after the IPO fell through," says CotÉ, 54. After falling four weeks behind on payroll, CotÉ laid off 24 of his 67 employees. And as part of a last-ditch bid to avoid bankruptcy, he and his two business partners signed over the rights to second mortgages on their homes to a lender. "We were trying to do the IPO to overcome our cash shortage," broods chairman Andrew Young. "Instead, this just exacerbated it."
Seldom are the consequences of a failed IPO as swift and severe as they were for Young Minds. But Young Minds' failure is not unique. According to information provided by IPO Reporter, in just the past two years nearly 100 companies--lured by the riches of a superheated IPO market and often rushed to market by investment banks eager to cash in on the bonanza--have endured the same humiliating letdown.
"We ramped up our overhead so we could handle the explosive growth of a company that goes public," recounts Thomas DeJordy, owner of Cafe La France, a Rhode Island-based restaurant chain that was supposed to do its IPO in 1996. In anticipation DeJordy hired a chief financial officer and a head of investor relations. He created a training department to churn out managers for the new restaurants he planned to open. To pay for it all, the company took on expensive bridge financing.
When his $5-million offering fell through for the second time, last May (hint: it doesn't help when, in your prospectus, your accountants doubt your company's ability "to continue as a going concern"), DeJordy was short of cash to pay off the bridge financiers. Instead, he had to compensate them with a sizable chunk of the company's equity.
Then there's Eric Kriss. His health-care-services company, MediVision, chose the spectacularly inopportune date of October 19, 1987--Black Tuesday--to file its prospectus with the Securities and Exchange Commission. The IPO was swiftly canceled. Nearly a decade later, Kriss was poised to take a second company, MediQual Systems Inc., public. But during the road show, the stock of the leading competitors collapsed. The upshot: cancellation number two.
Some failed IPOs, like Kriss's, are victims of bad timing. Others are victims of bad judgment, bad advice, or just plain bad luck. But in nearly all the cases Inc. examined, CEOs found that a failed initial public offering affects their company in ways they never anticipated. In just embarking on an IPO, CEOs accustomed to wielding control over their company's destiny swiftly lose that grip. Perhaps no other failure illustrates the cruel vicissitudes of the IPO process better than that of Wired Ventures Inc.
It should have been a slam-dunk IPO. Wired Ventures, publisher of Wired magazine, had everything in its favor: buzz about the company, top-drawer advisers, and a marketplace that couldn't pump money into new media fast enough. But instead Wired's IPO failed spectacularly.
How did it go so wrong?
In late 1996 a Wired writer was dining at a fashionable San Francisco restaurant when he discovered that seated at the next table were members of the Goldman Sachs team that had been brought in to underwrite Wired Ventures' IPO. The Wired staffer, still lamenting the nice sum he'd hoped to make on the IPO with his stock options, was struck by the levity of the Goldman Sachs team. "It hurt," the former Wired staffer recalls now, "because those were the people who were supposed to take care of us."
More than a year after its "IPO event," as Wired's officers insist on delicately calling the much-ballyhooed calamity, the company and its employees are still smarting. Though its flagship magazine has finally eked its way to profitability, the company has been buffeted by successive rounds of layoffs, including the November 20 axing of 33 people. Other talented staffers, their stock options still worth little more than the paper they're printed on, have headed for the exits. Louis Rossetto, the company's headstrong and mercurial cofounder, has stepped down as the magazine's editor-in-chief and publisher. At press time, a search was under way to replace him as chief executive as well.
The "old media" that Wired magazine regularly rails against in its articles have greeted the company's precipitous comedown with no little schadenfreude. The blistering consensus: that in shopping itself at far too rich a valuation and pretending to be more than it was, Wired Ventures fell victim to its own greed and famous arrogance.
But for all the company's overweening hubris, for all its executives' wealth-maximizing instincts, that assessment leaves a glaring question unanswered. Wired Ventures didn't do this alone: it put together a battery of top-drawer underwriters and other advisers to take it public. What could this team of professionals possibly have been thinking?
Inc. spent weeks interviewing dozens of the deal's central and peripheral players, as well as others who closely followed the attempted IPO. Those interviews make one thing clear: that in undertaking a public offering, a company steps into a world where the forces at work can far overshadow its own interests. Executives taking their company public might think the proceedings are all about them; in fact, they could be said to have little more than a bit part in a much larger set of machinations. And inside this high-stakes world, as Wired seems to have found to its everlasting humiliation, no one is there solely to take care of you.
In 1992 founders Louis Rossetto and Jane Metcalfe set out to create, as their business plan put it, "a radically different kind of computer magazine." In that, they succeeded spectacularly. With its wild design, strident attitude, and groundbreaking content, by 1996 Wired magazine had captured a circulation of 325,000, a whopping 95 advertising pages per issue, and the attention of the media world. Wired was on fire.
The goal, initially, was to turn a profit by the third year of operations. But driven by the conceit that Wired's "branded content with attitude" could be readily expanded across multiple media, Rossetto ranged far outside his native magazine medium into a host of ambitious spin-offs. Chief among them: HotWired, the magazine's on-line cousin, which won accolades for its stunningly original design but was losing money--and lots of it; HardWired, the company's similarly unprofitable book-publishing arm; and Netizen, the television program it started developing for MSNBC.
The result: instead of the "exceedingly lean" staff of 22 envisioned in the business plan, the company employed 338 people by the beginning of 1996, and 1995 expenses outpaced revenues by some $7.9 million. In the name of brand building, the drive toward profitability seemed to be suspended indefinitely.
Ah, but there was good news from the financial markets! The market for initial public offerings, it seemed, was heating up to a historic high, and companies that were losing lots of money could raise lots more of it from the public.
On November 29, 1995, computer-animation company Pixar had gone public to the tune of a $1.5-billion market capitalization. The following April, Internet search engine Yahoo!, which had never come close to turning a profit, rang up a $848-million market cap on its first day of trading.
The sudden craze for such financially flimsy new-media stocks seemed to confirm everything Wired magazine had been proselytizing in its pages: that the digital revolution was fast upon us, sweeping away all rules and preconceptions before it. And as the market rose to a fevered crescendo the volume of investment banks clamoring to take Wired Ventures itself public rose proportionally. "It would have been crazy for Wired not to try to go public," says a former Wired executive, echoing the sentiment fast becoming prevalent within the company at the time. "All this money was showering down, and not to hold your hands out to catch some would have been ridiculous."
In early 1996 the company's officers sat down with a five-year business plan to determine how much capital they'd need to finance their ever-lengthening roster of projects. "It was a sizable number," recalls Rex Ishibashi, who was then the company's chief financial officer. "We all kind of looked at each other and said,...'This begs the question, Do we need to go public?' "
The decision to go forward happened quickly. By the spring of 1996, Wired Ventures was holding a "bake-off"--the ritual of selecting an underwriting team from the various investment-bank suitors. One of the keenest wooers was San Francisco-based Robertson Stephens & Co. The bank was aggressive, Internet savvy, and oriented toward smaller companies; its chairman, Sandy Robertson, had visited Wired a year earlier to express his enthusiasm for Rossetto's creation. But Wired instead tapped Wall Street's most hallowed name, Goldman, Sachs & Co., as its lead underwriter, consigning Robertson Stephens to the supporting role of comanager--a decision many at Wired Ventures would later come to regret. "There was a general buzz of, 'Man, Goldman rules,' " recalls one Wired insider, noting that Goldman had just steered Yahoo!'s headline-grabbing IPO. "This was a slam dunk."
The underwriting team chosen, attention now turned to a second crucial decision: how to value Wired Ventures. The answer to that question would, in turn, determine the price at which Goldman would sell Wired's stock to its investor clients (for a tidy 7% commission).
In setting an offering price, an artful balance must be struck. If it's set too low, the stock could rocket through the roof in the so-called aftermarket--the public market that develops once shares start changing hands. In that scenario, investors privileged enough to get in at the offering price make out like bandits, but the company that's going public captures only a small fraction of the proceeds it might have gotten. If, on the other hand, the price is set too high, the company takes home a hefty sack of money, but its stock could quickly sink below the offering price in the aftermarket, generating negative publicity and angry investors.
For years underwriters had balanced the countervailing imperatives by hewing to a general rule of thumb: value the deal so that the stock will jump about 15% on the first day of trading. But now, with the IPO market at a frothy whir, a 15% spike was considered a sleepy deal indeed. It was much better to set the price low and let the stock leap, say, 50% in the aftermarket, or even double. "The companies that do the best in the long run leave some money on the table as a reward for the investment bank's best customers," explains Richard Shaffer, editor of VentureFinance. "It's almost always a mistake to try to get the last possible dollar."
That's why the investment world stood agog when, on May 30, Wired Ventures filed its preliminary prospectus with the Securities and Exchange Commission, and suggested the company was worth as much as $447 million.
To call that sum princely would be to understate the case woefully. Epochal would be more like it. At close to half a billion dollars, it was well beyond the outer limits of what investors had ever paid for a publishing company of Wired's size--never mind one whose operations were on track to lose $11 million that year (not even counting a onetime $20.5-million write-off to put the company's disparate assets under one corporate umbrella).
In a scathing article in The New York Observer, writer Christopher Byron dubbed the offering "a piece of junque du jour" and "the Wall Street equivalent of landfill." Byron described Wired's balance sheet as "growing worse by the minute, as if some kind of financial Ebola virus were spreading through the operation....Peel away all the financial razzmatazz and Wired Ventures has turkey written all over it--a business dependent on the financial equivalent of an iron lung for continued survival. Unplug the thing and the company drops dead."
So where had the fantastic valuation figure come from? As in any deal, it was largely the product of taking companies in the same field that were already public and seeing how the market valued them. But in this case, the choice of "comparable" companies could be described only as, well, a stretch. Though a few mainstream media companies such as Disney were among them, they also included Netscape, Yahoo!, CKS, America Online, and C/Net-- the kind of high- flying Internet companies Wired magazine wrote about rather than the sorts of print publishers Wired Ventures resembled.
The reasoning was spelled out in the prospectus: Rossetto evidently fancied himself the head of "a new kind of global, diversified media company for the 21st century." (Neither he nor Metcalfe would comment for this story, but through a spokesperson they pointed out that a group of private investors had paid new-media prices for a chunk of Wired a few weeks earlier, valuing the company at $305 million.)
For a company that still got 93% of its revenues from a single print publication, it was a startling flight of imagination. Whereas Wired the print publisher would likely be valued at from one to three times the company's 1995 revenues of $25 million, Wired the new-media company was now shopping itself around at more than 17 times revenues.
Press reports, deriding Rossetto's empire as a Potemkin village of money-losing ventures, were quick to seize on the outsized valuation as clinching evidence of his haughtiness and venality. But that interpretation obscured a more astonishing point: that apparently neither Goldman Sachs nor Robertson Stephens--the Wall Street professionals--dispelled Wired's distended sense of self-worth. (If Wired had gone to market at the $447-million valuation, the underwriters would have earned $4.2 million for helping Wired sell about 15% of the company.)
One Robertson insider asserts that Robertson Stephens was "less enthusiastic" than Goldman about the valuation. (Todd Carter, Robertson's senior banker on the deal, declined to comment publicly.) But Robertson Stephens may have been reluctant to express hesitation, given that a number of other investment banks were trying to get in on the potentially remunerative deal, and Robertson may have risked losing its exclusive position as the deal's comanager.
"When we originally filed, we all had stars in our eyes," one of the bankers on the deal now admits. "It was the insanity of the times."
"It was a stupid price. There was no excuse for it," says another source on the same side of the IPO team. "All companies in the process of going public have an ego. One of the jobs of the investment banker is not to get sucked into it."
Had the IPO factory kept chugging along at its furious and undiscriminating clip, the deal just might have flown anyway. But in early July, just before the team was to head out on its road show, the IPO market, and the market for Internet-related stocks in particular, swooned badly. "The pullback [from Internet companies] was so severe that it wasn't a question of trying to take prisoners," says David Menlow, president of IPO Financial Network, a data tracker in Springfield, N.J. "It was just taking the group out and shooting them." Many upcoming offerings were put on ice; even Hambrecht and Quist, the well-regarded high-tech underwriter, suspended its own IPO.
"We have decided to temporarily halt the countdown to our IPO," Jane Metcalfe announced to the disappointed Wired staff on July 15, "and wait until this storm has passed."
But two months later, when the market for initial public offerings showed signs of reviving, Wired put its IPO into gear again. According to two sources at Goldman, Rossetto began pressuring his underwriters to take a second pass at the market. (A Wired spokesperson says, "Both Wired and Goldman felt the technology market had recovered sufficiently in the fall of 1996 to warrant going back to the public market.") But now, as if awakening after a night of boozy revelry, neither Goldman Sachs nor Robertson Stephens could quite recall the enthusiasm for taking Wired public in the first place. The decision to sell Wired as an Internet play--already a stretch of the imagination--now looked like a liability: even the stock of Yahoo!, whose price had more than tripled during its first day of trading, had since tumbled back to its offering price.
That left Goldman Sachs with three choices about how to proceed--none of them easy. It could try to shop the deal at the original valuation. It could reconceive a more modest deal. Or, in what would be a highly unusual move, it could back out altogether. "You can't say, 'Gee, now that the go-go days are over, see ya,' " Ruth Epstein, then the Goldman Sachs vice-president assigned to the deal, explains now. So Goldman says it chose the middle road, pushing to shop the deal at a more magazine-like valuation of $150 million (or about 6.5 times the magazine's revenues)--a far cry from the $447-million valuation Wired had originally sought. But Rossetto "didn't want to entertain it," asserts Lawton Fitt, the Goldman Sachs managing director responsible for shopping the deal. (A Wired spokesperson says, "No one at Wired recalls this possibility ever being raised," but adds that in any case, "that financing strategy would not have made sense.") Rossetto was proud of his on-line properties, notes one member of the underwriting team, and wanted what he believed to be their considerable upside reflected in Wired's valuation.
There was more behind Rossetto's apparent intransigence than ego. As Fitt points out, "The company at that point was very anxious for money." In addition to supporting its money-losing side ventures, the company was planning to launch at least three new magazines with the IPO proceeds. Referred to internally as the " Wired-killers"--meaning they'd be so hip they'd put their progenitor out of business--these were going to include a design magazine with the working title Neo and a publication called The New Economy. The search for staffers was already under way, and at least one new hire, a crackerjack New York designer named Rhonda Rubinstein, had already uprooted herself and her husband from New York to move to the Bay Area. Scaling back the offering may have meant axing some of those plans--not to mention the vision of Wired Ventures as a full-scale new-media company.
In what was, in hindsight, clearly a mistake, Goldman eventually compromised on the valuation: an upper end of $293 million. Even with such a substantial haircut, the market volatility meant there would be only a 50-50 chance that the deal would go through, Goldman's Fitt says she warned Wired. "Louis knew he was taking a huge risk," confirms one Wired source close to Rossetto. (A Wired spokesperson demurs, "There's risk inherent in any transaction.") Robertson Stephens, however, apparently felt that even that compromise valuation figure was too high--and advised that the figure be reduced further, according to one Robertson insider, who notes that Wired had become "a lightning rod" for the backlash against stratospheric valuations. But Rossetto apparently believed that he had one weapon in his arsenal that couldn't be quantified: if he and his team could just get in front of prospective investors, they could sell the Wired story. Goldman agreed to let him try.
In early October the Wired management team--Rossetto, Metcalfe, chief financial officer Jeff Simon, and HotWired chief Andrew Anker--rehearsed its road-show presentation for the Wired staff. (Unfortunately, recounts Kristin Spence, Wired's second hire, they ruffled some employees by forgetting to leave out the part about the company's extremely low labor costs.) In an apparent nod to the financial markets, Rossetto trimmed his gray ponytail and even put on a suit. But as the Wired team took to the road to drum up investor interest, numerous participants say, it was clashing regularly with advisers. Of particular contention was how the final prospectus should look. The standard prospectus, with its dense gray rows of small type, "just struck us as unreadable," says one high-level staffer. Rossetto wanted his own designers to create a prospectus with a special font, distinctive page sizes, and Wired magazine's signature neon colors.
Uberconservative Goldman Sachs, however, had an altogether different design sensibility. Goldman's Epstein insisted that she'd be risking her career by putting Goldman's name on a document that strayed from the norm. "She kept saying, 'I can't do this, I can't do this, it's not worth my career,' " asserts one of the advisers on the deal. When Rossetto refused to relent, claim two participants, the Goldman team went so far as to suggest it might have to pull out of the deal. (Epstein says she doesn't recall making that threat.) Goldman's Fitt denies that her team ever threatened to walk, but she admits, "We did have very strong feelings that they [Wired] approach the financial markets in the way they're accustomed to being approached." In the end, Goldman grudgingly printed a compromise document: a white cover with Day-Glo yellow foldouts. "Was it worth it?" asks one Wired insider. "Probably not."
It was a silly spat, but many saw it as emblematic of a larger cultural rift between Wired--whose iconoclastic magazine routinely gave the finger to everything "old" and Manhattan related-- and its lead underwriter, the very embodiment of the New York establishment. "If you step way back," notes a former Wired higher-up, "Wired and Goldman Sachs working together isn't really a natural fit." The Goldman team never seemed to fully grasp Wired's business proposition, two high-level Wired sources contend, and continually changed its mind about how to frame the road-show presentation, leaving the Wired team feeling whipsawed.
Still, Rossetto's optimism shone through in the E-mail he sent to his employees on October 14:
Jane, Jeff, Andrew and I have been on the road a week now, and we've made two dozen presentations in 11 different cities....How's it going so far? Let's just say that in a crowded Fall market for IPOs, a lot of investors are making a point of coming out to hear our story.
By all accounts, the presentations were, indeed, well attended. But on road shows, head counts mean little. The real story is in the book.
The book is not another piece of Wall Street lingo; there's an actual, physical book that the lead underwriter carries throughout the road show. As the company meets one-on-one with institutional money managers, their tentative commitments to buy given numbers of shares--known as "indications of interest"--are jotted down in the book. For a deal to be considered viable, the indications of interest must typically outstrip the shares available to fill them by a ratio of at least three to one to ensure that there continues to be interest in the stock after the initial offering. A hot deal will be well more than three times oversubscribed.
By the early days of the road show, it must have become clear to Goldman Sachs that Wired Ventures was, simply put, a dog. Investor comments, as noted on the feedback sheets of Goldman's sales force, included "Good magazine, but the rest of the business is less compelling" and "Will need more spending discipline as a public company." At the end of October, as the road show staggered to a close amidst a welter of withering media commentary, Fitt and other members of the underwriting team met with the Wired team at their New York hotel. Together, they decided to slash the size of the offering from 4.75 million shares to 3 million shares, according to a Reuters report, and cut the asking price from a maximum of $14 to a maximum of $10 a share. The decision was a double-edged sword. "The company is now available at a better price," assesses David Menlow of IPO Financial Network, "but it's perceived to be a company that has a problem."
The gambit didn't work. Says Fitt, "Even at the revised price range, we didn't have a book." In fact, just hours before it was supposed to be officially priced for sale, the offering was still undersubscribed by 50%--laughably far away from a doable deal.
But first, a final humiliation. An E-mail message from Rossetto to the entire staff, intended to dispel the sting of the negative publicity, found its way onto the Internet, courtesy of a disgruntled former associate. As the deal headed for its demise, Rossetto's rallying cry wafted incongruously over the wires of the Internet. "Wired is on track to conclude its IPO and execute its business plan," he promised, railing against the "shoddy, if not malicious" news stories and crowing that "in the end, as F. Scott Fitzgerald put it, success is the best revenge."
Up until the final hours, members of the Wired road-show team were hoping revenge would be theirs. On the evening of October 24, they were holed up in a New York City hotel, having traveled to Manhattan to attend a cocktail party to celebrate the release of Mind Grenades, HardWired's first title. The next morning, they would visit the trading floor and watch as "WWWW"--a symbol at once evocative of the magazine's title and the World Wide Web it had done so much to glamorize--crossed the stock ticker for the first time. But toward dinnertime, the Goldman team phoned with bad news.
The theme from the surreal television drama Twin Peaks was floating through some Wired offices when an E-mail to the entire staff arrived from Jane Metcalfe. The IPO, the message announced, had been canceled.
The days since have been humbling ones. Not only was Wired deprived of the more than $60 million it had initially hoped to raise, but it had to swallow whatever it had already spent on advisers' fees and other expenses. (The prospectus suggests that those could have totaled as much as $1.3 million.) Wired magazine's U.K. edition had to be shuttered. The television show was discontinued after two episodes. Private investors did pony up $21.5 million--but on the condition, several insiders report, that the company take stringent measures to attain profitability. (To that end, the company claims it reduced operating losses from $11 million in 1996 to less than $2 million last year.) The drumbeat of criticism directed at Rossetto has been merciless.
But many of the deal's participants concede that there is plenty of blame to go around. No one will say so publicly, but privately other participants in the deal question how vigorously Goldman tried to sell Wired's stock. "Goldman didn't pull their end of the bargain," asserts one Wired adviser.
An underwriter, in a sense, has two customers: the company it is taking public, and its investor clients. Of the two relationships, the latter is arguably more important. Even though it will earn substantial fees from doing so, an underwriter will take a company public only once; it counts on institutional investors to buy its issues time and time again. As John Dyett, a banker at investment bank Salem Partners, puts it, the underwriter's sales team is "much more concerned about what Fidelity thinks about it in the morning light than what you think about it." Crucial to maintaining goodwill and credibility in the eyes of investors, of course, is not pushing investments that will lose money. Goldman Sachs, in the fall of 1996, seemed in danger of doing precisely that. It had agreed to take public a company that, as the market had plainly indicated over the summer, was not ready to be a public company.
Some of the deal's participants speculate that at some point along the way Goldman chose to let the deal die a quiet death. "I think Goldman basically said, 'There are two ways we can take our medicine here,' " one participant asserts. "The first is to say, 'We aren't going to take you public.' " The second, this participant speculates, would be for Goldman to "go out and make a token effort, and if it doesn't work out, say, 'Hey, tough market.' " The decision not to put the organization on the line, this deal participant adds, wouldn't likely be a formal one: "It's a real subtle, easy thing. You just kind of see if the deal sells itself."
An underwriter that's committed to completing an IPO at all costs, by contrast, has several avenues of recourse if the deal starts to falter. And some say that if an underwriter--especially one with Goldman's unmatched distribution clout-- really wants to push a stock, it can twist the arms of key investors to buy a piece of the offering, reminding them of the many millions they've made as members of its cozy IPO circle. "You just call in chips," explains one banker with knowledge of this deal. "That's Investment Banking 101."
Goldman strongly refutes any suggestion that it didn't push the Wired deal. "We worked extraordinarily hard to persuade people and take them through their objections," says Goldman's Fitt. "At the end of the day, investors make up their own minds." Noting that Goldman got the Wired team in front of more than 50 money managers during the road show, she adds, "After a meltdown in the Internet stock market, that doesn't happen without a lot of calls and cajoling." As for the original sky-high valuation, Fitt says it was "entirely reasonable" given the market conditions in the spring. "Had the market not been so volatile," she maintains, "I believe the offering would have been quite successful."
Asked for comment, Wired CFO Jeff Simon officially skirts the issue of Goldman's performance, responding tersely via E-mail: "We respect Goldman's professional reputation." But according to a former Wired executive, shortly after the deal's demise, Rossetto bitterly complained to several employees assembled in his office that Goldman hadn't put its full weight behind the deal. Among many Wired staffers, too, it's clear where fingers are pointed. "Louis and Jane," asserts one former Wired executive, "were talking like they'd been stiffed by Goldman Sachs."
Ultimately, though, such feelings of betrayal bespeak a certain navetÉ. It's a navetÉ that's forgivable for entrepreneurs who were far from players in the world of high finance--unless you count the fact that, as one magazine insider notes, they "had all read Liar's Poker." More to the point, it's a navetÉ that's by no means uncommon among companies entering the IPO process.
Wired's underwriters may have been sitting at the next table over from the distraught Wired staffer in that San Francisco restaurant, apparently unfazed by the deal's painful crack-up. But what Wired and scores of companies like it seem to misunderstand is this: the company and its advisers are never sitting at the same table to begin with. Their interests are never completely aligned. And once all is said and done--once the market euphoria has abated, once the road-show crowds have dispersed--the bankers get up and go home. It's the company that's left to clean up the mess.
Jerry Useem is an associate editor at Inc.
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