“WELCOME ABOARD, Eliot!” One-time dotcom securities analyst Henry Blodget has written a well-wisher note to his “destroyer”, former New York attorney general Eliot Spitzer, now that “several bizarrely connected twists of fate” have resulted in the two teaming up for the same online magazine.
Blodget, once a high-flying Merrill Lynch analyst whose bullish calls on technology stocks made him a household name in the late 1990s, became the source of much public ire after Spitzer published e-mails in 2002 in which Blodget privately rubbished stocks that he was publicly recommending.
A “piece of crap”, a “dog”, a “disaster” and a “piece of junk” were just some of the terms privately used to describe stocks that were subsequently eulogised to the public.
Charged with securities fraud in 2003, Blodget was banned from the industry for life and was fined to the tune of $4 million.
In 2004, his road to rehabilitation began after he was offered a financial column by Slate, the popular internet magazine. His career in online media has blossomed since then, and he has set up a number of well-regarded market blogs such as Silicon Alley Insider and Clusterstock as well as publishing a book, The Wall Street Self-Defense Manual, in 2007. In it, Blodget recommends low-cost index investing and warns against the perils of active management and analyst research.
Spitzer is hoping for a similar rehabilitation after accepting Slate editor Jacob Weisberg’s offer of a column pertaining to financial regulation and economic matters. Known as the “Sheriff of Wall Street” due to his aggressive targeting of corporate criminality in the aftermath of the dotcom crash, Spitzer went on to become governor of New York in 2006 and was widely believed to harbour presidential ambitions.
Any such ambitions were crushed after it emerged last March that he was embroiled in a high-priced prostitution ring. He was forced to resign in disgrace.
The irony that Blodget will now be a colleague of the man who “got me kicked out of the securities industry” has not been lost on him. “I can imagine Jacob Weisberg’s huge grin as he signed up his newest reputationally challenged charge, and I can imagine Eliot’s appreciation in return”, he wrote in a blog posting.
In it, Blodget resisted the opportunity to gloat, although he might get the chance to do so in person in the coming weeks. “I am definitely going to the Slate Christmas party this year”, he said. “I respected a lot of what he had done”, he said, who acknowledged he had even voted for Spitzer.
