Tuesday, January 05, 2010

Levin apologises for ‘worst deal of century’

During the dot.com craze of the late nineties, many internet stocks were trading for far more than they could ever possibly be worth. Many companies were taken public that had never turned a profit, and in some cases had not even begun operations.

At the height of the craziness, America Online purchased media giant Time Warner, for what was then valued at $164 billion worth of AOL stock. A more realistic value for the stock would have been less than 10% of that. Former Time Warner exec Jerry Levin has recently apologized for selling the company for a will-of-the-wisp:

Jerry Levin, who sold Time Warner for AOL shares inflated by the dotcom boom, has marked the 10th anniversary of the disastrous $164bn deal with a call for today’s corporate titans to accept responsibility for the recent financial crisis.
The former Time Warner chief executive, who had avoided apologising for the billions of dollars destroyed by the deal, on Monday made a mea culpa in an appearance on CNBC.

“I presided over the worst deal of the century, apparently, and I guess it’s time for those who are involved in companies to stand up and say: you know what, I’m solely responsible for it,” said Mr Levin. “I was in charge. I’m really very sorry about the pain and the suffering and loss that was caused. I take responsibility.”

At the time, there was talk of Yahoo purchasing Disney. That would have been interesting.

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