Imagine a used car salesman who learns that the shiny Mercedes in his lot has a busted engine. He tells his friends not to go near the lemon, but when he notices a long line of people coming in to see the car, he decides to add $10,000 to the sales price. And when you hand him your check, he grins and runs to the bank. That’s essentially what happened with Facebook’s IPO: In the weeks before its offering, Facebook seems to have told its bankers that its revenue this year would grow more slowly than it had previously estimated. Analysts at these banks relayed the new numbers to some of their top clients, but most investors never heard a word about Facebook’s bum engine. Then, despite the lower numbers, when Facebook and its underwriters saw “extreme” interest in its IPO, they decided to increase the price of the company’s shares—because, hey, if everyone wants in, why not?
That, anyway, is the story according to the business press. The news comes from dogged reporters at Reuters, the Wall Street Journal, and other well-known chroniclers of the financial world. But if you can’t follow all of these guys—if you have neither the time nor the patience to wade through each new bulletin on the IPO’s disastrous path—there’s really only one place you need to check. Just visit Business Insider, Henry Blodget’s invaluable business news aggregation site. Not only does Blodget keep breaking news about the IPO himself, but he’s also rounding up everyone else’s scoops, rumors, and theories, and he’s wrapping it all up into intelligent, coherent analysis.
If Facebook’s IPO is a steaming pile of dung, Blodget has become the Web’s leading scatologist—he’s taking samples, he’s coming up with theories about the digestive tract that made it stink so terribly, and he seems to be getting pretty close to determining just what sort of ugly monster laid this turd.
I feel the need to praise Blodget because no one else seems to be doing so. I understand the reluctance. There’s a lot about Business Insider that’s off-putting. Its headlines are loud and unhinged—lots of all-caps BOMBSHELLS, EXCLUSIVES, and over-the-top verbs, as in, “Ben Bernanke Just Murdered The Gold Standard” or “LIVE: EUROPE IS IMPLODING.” BI is also addicted to clickbaity, multi-page slideshows—“9 Years Of Mark Zuckerberg And The College Sweetheart He Just Married, Priscilla Chan” (434,000 pageviews so far) or “PRESENTING: The 101 Tech People You Have To Follow On Twitter” (377,000 views). (Fortunately there’s a “view as one page” option, which I, of course, clicked in order to find out if I’m on the list—I am, though I’d be endorsing BI either way.) BI’s design, too, is unapologetically appalling. Media people often point to the Drudge Report as the ugliest big site on the Web, but compared to the mess of photos, ads, and typography of weirdly varied sizes on BI’s front page, Matt Drudge looks like a master of restraint.
Business Insider’s worst sin is what Felix Salmon calls “over-aggregation.” As Instapaper’s Marco Arment points out, BI sends out rapacious Web-crawling robots that routinely scrape certain news sites and repost a few paragraphs of their text (with refashioned headlines) as Business Insider pieces. (Update, 1:49 p.m., May 24: Business Insider blames the issue on a technical snafu, and says it now links to third-party sites directly instead of creating the filched BI pages Arment was objecting to.) Its staffers are also masters of hand-aggregation; they’ll summarize everything from 5,000-word magazine articles to 180-word blog posts in digestible, blaringly headlined nuggets. In short, everything about Business Insider is optimized to maximize traffic, and it seems to be doing quite well as a result. The site—which was established in its current form in 2009—employs 60 people and says it gets 12 million visitors a month. Last year Blodget announced he’d raised $7 million to fund an expansion.
For all its many faults, though, when there’s fast-breaking business news like the Facebook IPO, BI’s model is hard to beat. Old-school journalists are sometimes a territorial bunch, reluctant to credit one another’s scoops. For instance, if you only read Wednesday morning’s lead Wall Street Journal story on Facebook’s IPO struggles, you wouldn’t have seen any mention of all the stuff Reuters had uncovered on Tuesday.
But Henry Blodget don’t care—he’s happy to consider scoops from all sides. In stories with lots of moving parts, BI’s quick aggregation is an asset—you can read everything from everywhere in one place, and Blodget and his deputies add much-needed context and perspective to the otherwise jargony onslaught of developments. And then, in addition to hard news, they’ll give you a sense of the emotions on the street—for instance, they’ll let you hear from the anonymous hedge fund manager who’s enraged about the IPO.
If BI’s only virtue was aggregation, it wouldn’t be very different from Drudge or the Huffington Post’s business section. Where Blodget—and his indefatigable staff, especially Joe Weisenthal and Nicholas Carlson—really shine is in the way they add their own sourcing and quick, sharp analysis to developing stories.* I don’t always agree with their perspectives (especially as they’re distilled in over-the-top headlines), but I always admire the way BI tries to place all news it encounters into a larger storyline.
Blodget’s own analysis is deepened by his past. As a Merrill Lynch analyst during the 1990s tech boom, Blodget became infamous for pumping up stocks in public that he was trashing in private. In 2003, he agreed to pay a $4 million fine and never work in the securities industry again in order to settle the SEC’s charges against him. (Disclosure: In 2004, he began his rehabilitation with a regular column in Slate. I’ve never met Blodget, but I have exchanged messages with him on Twitter.) Despite his wrongdoing—or maybe thanks to it—Blodget has a deep understanding of the inner workings of Wall Street, and he’s got lots of sources to call upon. He also writes in a clear, punchy way that’s accessible to people who aren’t terribly interested in business.
See, for instance, his post from Monday in which he tries to puzzle out how much Facebook’s share should sell for. He doesn’t rely on any scoops. All the stuff he cites—Facebook’s revenues as they compare to Google’s and Apple’s, Facebook’s infrastructure costs, its free cash flow—is public information. But Blodget pulled it together in a way no one else did, coming up with a number that, in retrospect, should seem obvious: Facebook is worth $16 to $24 a share, he says, or about one half its IPO price.
Also be sure to check out his follow-ups: “EXCLUSIVE: Here's The Inside Story Of What Happened On The Facebook IPO,” which contains the most thorough recounting so far of who screwed up in the deal, and then a piece he published this morning arguing that investors should be steaming about the banks’ selective disclosure of Facebook’s reduced revenue estimates. And then, do Blodget a favor: Keep refreshing his front page. BOMBSHELL: He’ll love you for it.
Correction, May 24, 2012: This article originally misspelled Joe Weisenthal's last name. (Return to the corrected sentence.)