Jeff and I took a limo to the Merrill offices at about 7:30. Our wives were to join us just before the IPO. By his uncharacteristic silence, I could tell that Jeff had not slept well either. We spoke very little. We simply stared, unseen, out of that black box of a limo into the morning.
It was very cold outside. Steam was rising out of the streets in front of the buildings. I stared out the window at the assortment of characters on their way to work, their typically fast paces quickened further by their rush to get out of the cold. I tried to relate to them in my mind, grasping for some point of reference.
I knew that whatever happened today represented only one step in a long and unpredictable process, that any financial gains today would be gains on paper only. But I also knew that this was opening day—the day on which our once tame idea would be officially released into the wild. Anything could happen. I had done my best to ensure it had the traits it needed to survive. Hadn’t I . . . ?
The driver opened our door in front of a tall building. We entered the maze of stone and glass and gave our names to the security people in the lobby.
When we arrived in the conference room, the atmosphere was tense. Bob and Frank were there, speaking quietly into their cell phones. Amanda, Kali and Chris, our PR team, were there. We were introduced to a couple of other people who worked for Merrill. They would be responsible for choreographing our day.
The first thing we were told was that someone had cut the power to the Neoforma servers during the night. Somehow, in this very secure data center, the emergency power shutdown switches on our circuits had been activated. It was probably an accident, but we couldn’t help wondering at the timing. The switches were designed to be very difficult to accidentally shut off. And the procedure required two people. Nobody should have been messing around near our cages in the middle of the night.
For the first time, I truly realized how much money was at stake. I thought of all the movies I had seen, where all sorts of nasty deeds were done over a million dollars. Yet, here there were tens—or even hundreds—of millions of dollars at stake. I couldn’t help but shiver. Would someone really go this far to slow us down? Surely not . . . This was only business.
But the short-term power outage was not the primary reason for the nervous tension in the room. One of the Merrill reps quietly updated us: “The SEC has asked a few last-minute questions this morning . . . purely routine. Apparently, they have reversed themselves on how you should report one of your acquisitions. They will have to get new information before they will clear you for the IPO.” When he saw our apprehension, he reassured us, “We should still be able to have the offering today though . . . it just might be delayed a couple of hours.” That didn’t sound good, but it didn’t sound that bad either.
When it became clear that it would be awhile before our team at the home office could settle the issue with the SEC, Jeff and I were given a tour of the Merrill offices.
We visited all the major showpieces. There was the huge bull statue in one of the lobbies, looking strong and proud. And there was the trading floor, which we viewed from a second-floor overlook: a bright, high-ceilinged room, lined with TV monitors and stock tickers, buzzing with activity. Our guide pointed to a section of the room: “Casual visitors are not allowed on the trading floor, but that’s where you will be standing when your stock begins trading.”
We watched the action through a large glass window. A few of the brokers watched us, too, as they spoke into their headsets. I supposed that we were no less abstract to them than they were to us.
The markets had just opened. Row upon row of men and women were positioned in front of two, three or four computer screens each. Periodically, they would gesticulate wildly, calling out the bets, I supposed. Serious-looking pit bosses were posted here and there. I had no idea what anyone was actually doing, but they reminded me of the crowds of enthusiastic people that gather around a craps table— another wild game controlled by rules I am unfamiliar with.
When we returned to the conference room, the atmosphere was even more somber. It was a half-hour before the scheduled time for our IPO and now there was doubt that we’d be able to have the offering at all that day.
Apparently, there was a huge snowstorm heading into Washington DC, where the SEC offices were located. Many SEC employees, including those handling our IPO review, were leaving the office early to beat the storm home.
The main concern that Merrill had was not that the offering would slide a day, but that the investors might read something negative into the delay. A rumor might start circulating that the SEC had found some major problem with Neoforma. The investors might not purchase the stock after all. If a few key investors backed out, others might follow . . .
A tall, serious and self-important man came into the room around noon to speak with Bob and Frank. He was David Risinger, one of Merrill’s analysts. He said the SEC would not be getting back to us today. But the good news was that the major investors were not going to back out, even though the offering would be moved to a Friday.
Friday, I learned, was generally a bad day to have an IPO, since there is often a lower stock sales volume and not as much press coverage. “Too bad,” someone said. “Today was a good day in the market. You could have done very well.”
We were all exhausted from lack of sleep and the emotional letdown of the day. I wanted to go back to the hotel and collapse, but Merrill had already arranged our celebration party for that evening and had reserved a private room at a very prestigious restaurant. Since the reservation couldn’t be changed, we had to show up.
I am sure we ate good food and drank good drinks that night, but I mostly remember the atmosphere of desperate obligation. The bankers were disappointed. They had missed out on a huge opportunity today. They knew that the risks of diminished returns increased with every delay. And now they were forking out a small fortune for this cheerless gathering.
Our Neoforma team was feeling tired and defeated. We had already heard about the rumors of our demise spreading on the assorted online IPO message boards. Our PR team was frantically trying to reschedule the crop of media interviews they had set up with Bob. It wasn’t looking good. A company that sold hospital supplies wasn’t a very sexy story to begin with, so getting last-minute interviews slotted into a Friday was not going to be easy.
Bob gave some kind of speech, trying to sound upbeat. I may have too. I don’t remember.
By the next morning, when Jeff and I arrived at the Merrill offices, the situation had gone from bad to worse. Our team in the home office had worked through the night to revise and resubmit the documents to the SEC specifications, but nobody at the SEC was answering their phones. The storm there was so intense that most people weren’t going into the office.
Various, increasingly senior, people at Merrill visited our conference room throughout the morning. They were using all of their connections to find out what the heck to do about our IPO. Somebody finally got through to someone senior at the SEC. The good news was that the SEC was very apologetic. The bad news was that there was no chance of getting a response today. Almost everyone was snowed in. The IPO would have to be postponed to Monday, at the earliest.
The only day worse for an IPO than Friday is Monday. Because there is so much staging that must be done the day before an IPO, the bankers weren’t even sure that it was possible to have an IPO on Monday. After doing some research, they found that there had been a handful of successful IPOs on Mondays and agreed that maybe we could pull it off.
Key investors were polled again. This time, they expressed a bit more concern, but the coalition seemed to be holding together—for now. Everyone still thought there was money to be made here.
After hastily arranging plans for someone to watch the kids an extra two days, we made the best of our weekend. We hustled through the bitter cold, seeing some museums and catching a jazz show. But, try as we might to keep our minds on the present, the future kept pulling us forward. Time seemed as frozen as the air.
On Monday morning, we glanced hesitantly through the doorway, expecting the worst. But this time everything was different. It was as if the ground had slipped out from under me, propelling me at full speed into the room. Things were moving with purposeful frenzy. We had received our clearance from the SEC. (A few weeks after the IPO they would take the unprecedented step of sending us a letter, apologizing for delaying the IPO in the first place.) But in this moment, everyone was focused entirely on the near future.
This time, we called our wives and asked them to join us soon.
A young, stark woman I had seen only once on Thursday and once on Friday, entered the room with intense focus and seriousness. She was in charge of choreographing the first few minutes of our IPO. She said various things to the Merrill folks in the room. Her words seemed to indicate that everything was coming together. I found myself thinking, She is so efficient at this that I bet she makes a fortune. Some signals were exchanged and she sailed back to the floor.
Anni and the others, including Jeff’s two daughters, arrived soon thereafter. We were escorted through some doors and walked out onto the trading room floor. To our immediate left, high up on the wall, was the Neoforma surfboard. We were told that the surfboard was very popular.
A few of the brokers cheered. Most interrupted their business only long enough for quick glances our way. I knew that they had witnessed this scene many times—founders and executives walking onto the floor for the IPO ceremony. But I knew that their interest was about more than us. Our offering would be the first test of the IPO market since the Y2K jitters had evaporated. Our success would help predict their success.
After a brief photo session under the surfboard, we were hurried around the corner to an intersection of aisles. To the right of us was the computer that would officially start the sale of our stock. To the left of us were the rows of brokers who would handle the individual sales of our stock. A bullish, well-dressed man, the pit boss, described what would happen. I heard his words, but was too hypnotized by the rows of letters and numbers cascading down the screens and across the tickers to understand what he was saying.
David Risinger joined us. I knew that the time had come. I held Anni’s hand. The man at the starting computer pointed out the numbers for us to watch. One number represented the current asking price and the other represented the current offering price. When the two numbers intersected, a sale would be made, representing the current value of the stock. With a simple nod of David’s head, the selling began.
The group of previously calm brokers suddenly began gesturing wildly—talking into phones, shouting numbers back and forth. To
give my paralyzed body something useful to do, I focused on the numbers on the screen.
The first number I saw was $39. The brokers had settled on a starting price of $13. How had the number jumped to 39?
That’s what my brain was busy working on. My body, however, was working on holding Anni up, when my own legs were hardly working. I felt her slump against me. She was having a hard time standing too.
We listened to the brokers yelling out this or that about so many shares of Neoforma. We watched the numbers change . . . $40 . . . $41 . . . $42. It seemed to slow down there. Someone, probably one of the brokers, commented that there was not much else to see here, and herded us off the floor.
We gathered in a larger, more luxurious room with an amazing view of a bright New York skyline. Champagne was poured. We shared smiles, handshakes and hugs, but neither Anni nor I were much in the mood for conversation.
We had put a lot on hold for Neoforma. Whatever the future held for Neoforma, it didn’t need us anymore. We’d still be there for it, but it had its own life now.
Before dinner, Jeff and I were going to ride along with Bob, Frank and our PR people for the press interview tour. Bob would be the only one speaking, but we all wanted to be there, watching. We said reluctant goodbyes to our wives and hit the road.
Because it was a Monday, our PR group had had difficulty setting up the kind of high-profile interview that they had arranged for the previous Thursday. However, once the news spread about the scale of the stock’s success, new interviews were being requested by the moment.
We rushed in and out of limousines, reaching some television interviews minutes before the scheduled airtime. Bob would quickly be wired up for each interview, shake hands with the host, get asked general questions, respond with well-rehearsed answers, and move on. In the limo, between TV interviews, Bob was on the phone giving interviews to other members of the press.
As we watched Bob live on the studio monitors, we saw the price of the stock at the bottom of the screen. It was still going up.
We met up with our wives at the last stop on the press tour, the NASDAQ building. Here, the official welcoming ceremony would be conducted and broadcast immediately after the market closed.
At market close, a NASDAQ executive formally welcomed Neoforma. Bob gave his usual speech, then gestured to Jeff and me. He wanted us to speak too.
Acckk! I can be a good, calm speaker with a little preparation. But I am usually ludicrous without preparation. I tried to control my panic, as I walked toward the podium. Our stock ticker was prominently displayed on the room-high screens behind the podium. We were the top gainer of the day. The stock had closed above $52 per share. Jeff said something first, then I said some awkward, overzealous words.
Our next stop was at the offices of Neoforma’s PR agency, where we would officially speak to the company employees who were gathered in the lunchroom back home. Jeff, Bob and I ended up alone in a small elevator, riding up to the PR office. We hadn’t had a chance to speak with each other since the IPO.
Bob towered above us in the small dark space, grinning. “So, do you realize that . . . between the three of us . . . we represent almost a billion dollars on paper?”
We nodded, and shared disbelieving smiles moments before the elevator door opened.
We crowded around a speakerphone in a small conference room. There was a great deal of raucous cheering on the other end of the line.
Bob and Frank spoke first. Jeff and I spoke too. This time, I could speak from my heart. I said that the real heroes behind this day were our partners, spouses and children, whose patience and support had made this all possible.
The restaurant that night was very hip and very loud. An array of exotic drinks tempted us. We obliged them. Long before appetizers were served on the long, up-lighted, curving marble table, I was thoroughly soused. I remember exotic, artistically presented food. I remember a wall of chatter around me.
I also remember Risinger walking up to me, shaking my hand, and saying “Congratulations!”—the first and last word he ever spoke to me.
Anni and I caught a flight out of New York the following morning. A heavy snowstorm had hit the region hard during the night. Ours was one of the last flights out before the local airports were closed. Bob and his wife Patsy didn’t beat the storm to the airport. Bob had been on the road for three weeks. He and Patsy were determined to get home, any way they could. So, they rented a car, braved the storms and headed home to Ohio. I can only imagine the surreal scene during the five hundred mile trip—whiteness everywhere—small portals on the front window of the car, displaying little more than a moving stillness.
Inside, there must have been a restless stillness too, on that journey from an excess of everything through an excess of nothing.
Throughout our harried ride to the airport Anni and I had believed that we wouldn’t make it out. But we were so anxious to get home and back to our children that we wanted to try our best.
When we picked up our kids at school that afternoon, we were greeted enthusiastically by one of my older son’s best friends. Miles ran up to us and yelled, “Congratulations! You’re rich now!!”
Our boys were six and nine. We had tried to explain to them what we were doing in New York, without referring to the financial aspects of the IPO. And only a few people at our kids’ school knew that I had started a company, let alone that it had posted the sixteenth largest IPO gain in history the day before.
Glancing around as discreetly as I could to see if anyone had overheard, I said “Thank you,” hoping nobody had noticed this exchange—or that, if they did, they had dismissed it as childish exuberance.
That evening, I reviewed the Wall Street Journal. There was an article about the success of our IPO. They said it seemed the market was still alive after all—a company called Neoforma had proven it!
At the end of the article, a mention was made about the fact that Jeff and I were now worth more than $204 million each.
Everything felt the same. Nothing felt the same.
Go back and read Part 2