Nothing New In New Economy

The delisting of by the Nasdaq Stock Market on Monday is being interpreted elsewhere as somehow “symbolic” of the ill-fated Internet Gold Rush., after all, turned Wall Street on its ear in November 1998 when its initial public offering posted a record first-day gain, with shares closing at $63.50, or 606% above their $9 offer price.

But when the Internet bubble burst last year, it burst especially hard on money-losing, slow-growth companies heavily dependent on Web advertising — companies like online community site

By the time TGLO was notified in early February of the pending Nasdaq delisting, it had been more than four months since shares last traded above $1.

Other than the notoriety of its moonshot IPO — which was subsequently eclipsed by VA Linux Systems’ ticker debut in December 1999 —’s is an entirely typical cautionary tale of the era, when wildly optimistic business plans and relentless Wall Street hype conspired to create instant, and mostly illusory, wealth.

Still, at least you can chalk up some of the excesses of the late ’90s to naivety, when many bought into the ridiculous notion that the Internet Economy played by its own set of rules.

By last year you’d think people would have known better. Yet how to explain to decision by name-your-price e-tailer to grant some of its top executives hefty pay raises in 2000, along with bonuses and even the forgiveness of millions of dollars in debt? All during a year when the company’s stock price was plummeting and about one-quarter of its workforce was being laid off.

According to SEC documents filed Monday, CEO Daniel Schulman was given $3.8 million in restricted stock and had $4.8 million in debt forgiven. Chief marketing officer Michael McCadden got a $1.4 million bonus, while the company forgave COO Jeffrey Boyd’s $2.1 million loan.

In the filing, PCLN justified the moves by citing a need to keep the company’s executive officers “in order to facilitate the turnaround plan.”

Laying off workers while awarding millions to top executives. Sounds pretty old economy to me.

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