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Broadbandits: Inside the $750 Billion Telecom Heist 1st Edition


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Investigating the financial fraud and misguided power plays that brought down the telecom industry

Once the foundation of the Dow and NASDAQ, the telecom industry has eaten up more capital than any other industry in recent history and has nothing to show for it. Today, it is by far the worst culprit in the spate of financial dirty dealings that have been splashed across the business pages, and yet the rewards reaped by top executives at many of these failed or failing companies have been inversely proportionate to their decline. Broadbandits takes readers behind the scenes to get the story they won't get in the media. Investigative reporter Om Malik follows the money trail and deciphers the actions and motivations of a generation of new economy "barbarians" that brought down this once lucrative industry. This intriguing book offers an inside look into the telecom bubble, with tales and anecdotes about mavericks who turned simple light and glass fibers into veins of gold, financiers who got greedy and fleeced unsuspecting millions, clueless venture capitalists who thought they'd tapped into the mother lode, hapless entrepreneurs who believed that they were changing the world, and self-proclaimed pundits who were cheering it all on from the sidelines. Broadbandits is a compelling account of the downfall of telecom giants such as WorldCom and Global Crossing, and will show readers how many telecom upstarts and veterans alike became victims of what one chief executive aptly described as "high-yield heroin."

Om Malik (New York, NY) is a Senior Writer for Red Herring who focuses on the telecommunications sector. Prior to joining Red Herring in July 2000, he was senior editor at Forbes.com. His work has also been published in newspapers and magazines such as The Wall Street Journal, Business 2.0, Brandweek, and Crain's New York Business. For a very brief while, he was a venture capitalist.


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Editorial Reviews

From the Inside Flap

Praise for Broadbandits

Broadbandits weaves together a story of greed, money, power, and crime to reveal to the millions of people who lost their investments in telecom stock where, and to whom, their hard-earned dollars went.
--Charles Dubow, Executive Editor, Forbes.com

Om Malik has the courage to write that instead of reporting EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), the CEOs he calls broadbandits reported their own style of EBITDA (Earnings Before Irregularities, Tampering, and Dubious Accounting). His pen is as wicked as Mark Twain's.
--Blaise Zerega, Managing Editor, Wired magazine

Rare for a book in its field, Broadbandits is an attractive, stodge-free read. Accessible, even mischievous, it should prove instructive not merely to geeks, (disgruntled) venture capitalists, and bankrupt telecom tycoons, but also to that species most neglected of all--the lay reader.
--Tunku Varadarajan, Editorial Features Editor, The Wall Street Journal

Broadbandits is a fast-paced tale of the key players responsible for inflating the telecom bubble. Many were fools, many others rogues, some managed to escape with riches, some were ruined. With an unforgettable cast, Broadbandits is a sobering account of monumental financial waste and the derailment of hundreds of thousands of lives.
--Andrew Odlyzko, Director, Digital Technology Center and Assistant Vice President for Research, University of Minnesota

From the Back Cover

Praise for Broadbandits

"Broadbandits weaves together a story of greed, money, power, and crime to reveal to the millions of people who lost their investments in telecom stock where, and to whom, their hard-earned dollars went."
Charles Dubow, Executive Editor, Forbes.com

"Om Malik has the courage to write that instead of reporting EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization), the CEOs he calls broadbandits reported their own style of EBITDA (Earnings Before Irregularities, Tampering, and Dubious Accounting). His pen is as wicked as Mark Twain's."
Blaise Zerega, Managing Editor, Wired magazine

"Rare for a book in its field, Broadbandits is an attractive, stodge-free read. Accessible, even mischievous, it should prove instructive not merely to geeks, (disgruntled) venture capitalists, and bankrupt telecom tycoons, but also to that species most neglected of all the lay reader."
Tunku Varadarajan, Editorial Features Editor, The Wall Street Journal

"Broadbandits is a fast-paced tale of the key players responsible for inflating the telecom bubble. Many were fools, many others rogues, some managed to escape with riches, some were ruined. With an unforgettable cast, Broadbandits is a sobering account of monumental financial waste and the derailment of hundreds of thousands of lives."
Andrew Odlyzko, Director, Digital Technology Center and Assistant Vice President for Research, University of Minnesota

Product details

  • ASIN ‏ : ‎ 0471660612
  • Publisher ‏ : ‎ Wiley; 1st edition (November 8, 2004)
  • Language ‏ : ‎ English
  • Paperback ‏ : ‎ 352 pages
  • ISBN-10 ‏ : ‎ 9780471660613
  • ISBN-13 ‏ : ‎ 978-0471660613
  • Item Weight ‏ : ‎ 14.1 ounces
  • Dimensions ‏ : ‎ 5.67 x 0.98 x 8.7 inches
  • Customer Reviews:

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Customer reviews

4.3 out of 5 stars
19 global ratings

Top reviews from the United States

Reviewed in the United States on June 26, 2003
Though much of the financial carnage associated with the companies chronicled in Broadbandits is well documented, I found Om Malik's coverage of the human element and motives involved to be both fascinating and illuminating.
His timing on publishing this book could not be better, given the backdrop of ongoing investigations and legal action against many of the companies or principals he writes about. I find it ironic that a number of these "visionaries" and "promoters" who were paid like kings because they were supposedly so invaluable to their companies or firms, now use as a defense that they really didn't know what was going on in their companies. It is amazing people like Bernie Ebbers who made literally hundreds, if not thousands, of presentations to knowledgeable investors, who ask insightful questions, could now make this claim. Also, where are the other research analysts on Wall Street. It is one thing for Grubman to be an active co-conspirator, but where was the independent research that should have debunked these charlatans before they got started. The easiest myth to debunk of all is the myth that the Internet was growing 100% every four months over a sustainable period and press releases that claimed dial port consumption was increaseing 10% per month. Any reasonably asstute person could do the calculations on this and realize that there are not enough people or information to sustain this growth rate for more than a fleeting moment. In a matter of a couple of years everyone in the US would have had to have been signed onto an individual dial port twenty-four hours a day. Om Malik makes it clear how phony these arguments are and how dishonest and disingenuous they are. Future generations will look back on this much as we look back at the Tulip Bubble in Holland and wonder how did anybody ever believe any of this. This is a great first book for Om Malik.
6 people found this helpful
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Reviewed in the United States on September 19, 2003
It was the best of times (money flowed like water), it was the worst of times (in retrospect, for those who didn't cash out at or near the top). It was a great human drama, and unlike Dickens, it was all 100% nonfiction - it really did happen. For anyone in the telecom industry who lived through the bubble, and now the depression, for anyone who invested in the telecom bubble, or for anyone curious about one of the greatest financial manias in human history, I recommend Broadbandits.
Broadbandits profiles most of the key individuals and companies who helped inflate (and in many cases profit from) the telecom bubble, at a steady one company per chapter pace. Being in the telecom industry myself (still), I can state that Malik accurately captured the major stories I already knew, so I assume the rest of the book is generally factual. Although Malik focuses most of his anger on company bigwigs, he also admits that a bubble the size of this one could not have been created without active, willing participation from all sectors of the community: greedy disconnected CEOs, conflicted Wall Street and industry analysts, small investors who wanted to double their money overnight, and a unique confluence of regulatory and technological changes and advances.
Broadbandits could have been better. Malik's principle sources are business press articles, and he has a fascination with documenting dollar figures, so he doesn't probe as deeply as he could into the reasons behind the actions he reports. The book was written hurriedly (to keep it topical), and there are more than a few data errors. Malik correctly cites Ravi Suria's seminal report on the debt and finances of telecom firms, which proved how the emperor of telecom stocks had no clothes (I remember almost crying for joy when I originally read Suria's report), but he missed Jeremy Siegel's equally important bubble bursting op-ed piece in the Wall Street Journal proving that Cisco and other high P/E stocks were way overvalued and that we were experiencing another "Nifty Fifty" tech mania episode. Finally, to return to my Dickens reference, the book would be even more dramatic if it recounted more anecdotal stories and statistics of the small investors and employees who lost their money, retirement savings and jobs, to provide contrast to the well-documented stories of folks who cleared many millions during the boom. However, I do admit that with the title of Broadbandits, the focus is on the bigwigs who inflated and profited from the bubble.
One more minor quibble: two of the people who praise Broadbandits on the back cover are thanked by Malik in his Acknowledgements. Conflicts of interest are everywhere! And just what did Malik do during his brief stint as a venture capitalist?
9 people found this helpful
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Reviewed in the United States on July 20, 2003
A lot of us -- and I must include myself to some extent -- were dazzled by all that apparent growth. I always thought that there was a lot of hype out there, but never saw the complete train wreck coming.
From Malik's book it sounds like Gilder didn't either, and -- it seems to me -- that as the wreck was approaching he was screaming "full steam ahead." It's too bad really, because in the end some of Gilder's predictions about wasting bandwidth may well turn out to be prescient. But as that famous quote from Keynes said, "In the long run we're all dead."
What the industry really needs as a replacement to Gilder is someone more like an Old Testament prophet -- that is someone who can at the same time chastise and point specifically to the right path. (Gilder was more of a psalmist -- singing praises to the Lord and making us all feel good about ourselves.)
I think our new prophet is also going to have to talk a lot less about raw growth and a lot more about where value is actually to be found.
One person found this helpful
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Reviewed in the United States on June 8, 2003
The latest run-up of telecom stocks -- for no reason -- is an interesting backdrop to reading this book, because you can see it all happening again. Malik's insights are deep and enjoyable, the pace comfortable, and the writing is engaging. While I can't say I enjoyed re-living the disasters in the telecom industry, I can say that it's something we all should do to avoid making many of the same mistakes. A great beach book.
3 people found this helpful
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Reviewed in the United States on August 5, 2003
This is a good read for those who want to know how cycles come and go in the economic world and how those in the right place at the right time with shaky ethics and/or poor strategic skills can get filthy rich. The sheer stupidity of investors, bankers and "yes men" employees is stagering and worth the price of the book just for this alone.
3 people found this helpful
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5.0 out of 5 stars ブロードバンドのペテン師列伝
Reviewed in Japan on August 8, 2003
ã"の一冊は、æ°-鋭のジャーナリストが、99å¹'に頂点ã‚'迎えたアメリカのãƒ-ロードバンド・バãƒ-ルã‚'あおり、大もうã'ã-た人たちã‚'Broadbandits:æ-¥æœ¬èªžã«å¼·å¼•ã«è¨³ã™ãªã‚‰ã°ãƒ-ロードバンドのペテン師åˆ-伝。とã-て、その人となり、いくら儲ã'たか。そã-て、いくら損させたか。というã"とã‚'、åŒ...括的にまとめた一冊である。
通信事業è€...に偏るã"となく、ãƒ-ロードバンドの食物連éŽ-とでも言おうか。æ-°èˆˆé€šä¿¡äº‹æ¥­è€...、ベンダー、証券アナリスト、そã-てãƒ"ジョナリーまでがカバーされている。
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å¿...要に応じて買い推奨銘柄の企業のå-締役会にまで出å'いてアナリストå'ã'の想定問ç­"ã‚'指導するまでã-てè²!·ã„相å 'ã‚'盛り上ã'まくった証券アナリスト。
æ-°èˆˆé€šä¿¡äº‹æ¥­è€...からの売り上ã'ã‚'かさ上ã'するために何のã"とはない自分でé‡'ã‚'貸ã-て自分の機器ã‚'買いå-るベンダー・ファイナンスで株価対ç­-にå¥"èµ°ã-た通信機器メーカー。
ãƒ-ロードバンド需要が天井知らずで伸び続ã'ると予言ã-、相å '形成に大いに貢献ã-たãƒ"ジョナリー。
特定個人の名前がたくさã‚"出てくる。ã-かã-ながら、ã"れはバãƒ-ルというものの構造的な問題でもあるというように読è€...たちに悟らせようともã-ていると思える。
ãƒ-ロードバンド・バãƒ-ル企業ã‚'糾弾するというã"と自ä½"がæ-¬ã‚'過ぎてã-まったように思える今時のæ-¥æœ¬ã§ã¯å¤šåˆ†é‚¦è¨³ã¯å‡ºãªã„だろう。ã-かã-ながら、いつ何時、また、バãƒ-リーなæ-¥ãŒæ¥ã‚‹ã¨ã‚‚ã-れない。ãƒ-ロードバンドの叩きうりが展é-‹ã•ã‚Œã!¦ã„る昨今のæ-¥æœ¬ã®çŠ¶æ³ã‚'落ち着いて見据えるためのè¦-点。
そのような備えさせてくれる一冊なのだと思う。