Hackoff.com – Chapters Eight, Nine, and Ten

I am enjoying reading Hackoff.com, Tom Evslin’s murder mystery that takes place in the Internet bubble and aftermath.  But I have found myself reading it like a book, not a blog.

I do not read each daily post as they come out.  I wait a couple weeks and print out at least a chapter and if I get behind, several chapters.

Plane time is great reading time and so I got through three chapters just now and am now caught up with the blog.

This story is getting really good.

In Chapter Eight, we start to get some clues to the murder.  We find out that Larry and his wife separated shortly before he died.  And we find out that he’s a wild mushroom nut and that he ate some bad ones before being shot. I am thinking the murder has something to do with the Palestinian characthers he met in Davos, but of course I could be dead wrong.

In Chapter Nine, we get a lesson in the economics of the "shoe", a slang word for the over allotment option that underwriters get in a public offering of stock.  The "shoe" allows the investment banks to oversell the deal in hopes that the stock will trade up. They effectively sell 10% more stock than the offering provides but get the right to buy another 10% from the company and selling shareholders (if there are any).  This effectively makes the investment bank short the stock at the closing of the IPO.  But, and this is a big but, they can cover their short by purchasing more stock from the company and shareholders at the offering price.  So it’s a no lose short.  Because if they stock goes down, they can buy in the open market at much lower prices and pocket the profits.  Because they have no obligation to purchase the "shoe".  This happened in the ITXC secondary and Tom tells the story as only someone who was on the losing end of an unfair trade can.

In Chapter 10, we smack right into 9/11. In Hackoff, Larry and his senior team are in World Trade South discussing a merger with their arch competitor.  Again, Tom takes liberally from the ITXC story. On September 11th, Tom and ITXC’s CFO Ed Jordan, were doing the exact same thing, discussing a merger with their arch competitor, but thank god that discussion was in the suburbs of another east coast city, and not anywhere near the WTC.  But you’d never know it by the way Tom tells the 9/11 story.

I have a feeling that Hackoff is going to be a great book.  If you’d prefer to read it in hard back, you can pre-order it on Amazon.  It comes out on February 1st.