Iraq Delivers Weapons Report
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SJMN Operator: NN / Job name: XXXX0523-0001 / Description: Zone:MO Edition: Revised, date and time: 04/26/75, 11:23 Typeset, date and time: 12/08/02, 00:12 1208021MOA0A001 / Typesetter: IIIOUT / TCP: #1 / Queue entry: #0399 CYAN MAGENTA YELLOW BLACK 12/8/2002 MOA1FC SPORTS | GIANTS SIGN TWO, KEEP OPTIONS OPEN ON KENT | PAGE 1C RAY DURHAM, MARQUIS GRISSOM JOIN TEAM SECOND BASEMAN KENT OFFERED SALARY ARBITRATION Sunday ARTS & ENTERTAINMENT L.A. ARTISTS GO BEYOND TRAVEL giving ❤ SPECIAL 16-PAGE SECTION COOL FIVE IDEAS FOR CHRISTMAS, Vision, sincerity on display CALIFORNIA-STYLE Philanthropy in Silicon Valley at San Jose Museum of Art PAGE 1H BEHIND THE BUSINESS SECTION PAGE 1E $1.00 | FINAL EDITION | DECEMBER 8, 2002 | SUNDAY FC . WWW.BAYAREA.COM SERVING NORTHERN CALIFORNIA SINCE 1851 THE NEWSPAPER OF SILICON VALLEY THE INSIDERS Iraq delivers , weapons RICH MAN report 12,000-PAGE DOCUMENT ISSUED WITH A THREAT Mercury News Wire Services BAGHDAD, Iraq — Iraqi President POOR COMPANY Saddam Hussein made a grand ges- ture of cooperation with the United HOW SOME SILICON VALLEY EXECUTIVES MADE FORTUNES Nations on Saturday, turning over a 12,000-page inventory of materials he possesses that could be used for WHILE THE VALUE OF THEIR COMPANIES PLUNGED weapons, but he then turned his open hand into a fist. Iraqi officials said the released doc- (AND IT’S ALL PERFECTLY LEGAL) uments confirmed, in rebuttal of U.S. and British claims, that Saddam Hus- sein’s government had no weapons of FOUR WINNERS mass destruction and no current pro- A Mercury News analysis shows insiders at 40 companies took home AND THEIR LOSERS grams to develop them. Saddam also chose Saturday to de- $3.4 billion from selling their stock. Meanwhile, their company’s value fell liver a statement on Kuwait, offering an apology to God if Iraq had un- at least 99.5 percent from what it was at the height of the boom. knowingly harmed the desert king- dom with its invasion in 1990. But he COMPANY EXECUTIVES 1997-2002 MARCH 31, 2000 – SEPT. 30, 2002 coupled that muted retreat with an appeal to Islamist militants in Kuwait Billing software 21 Sold stock Company’s — a diverse group with at least some firm is based insiders worth change in value Dennis Barsema, past links to Al-Qaida — to join him in Cupertino. $704 million -99.5% Former CEO of Redback Networks See IRAQ, Back Page Inktomi develops network Company’s optimization software and 15 Sold stock HOWMUCHHESOLD worth change in value is based in Foster City. insiders $600 million -99.8% 1.8 million shares for WHAT’S NEXT $138 million ■ The cargo of documents, CD-ROMs and Exodus Communications, COMPANY’S VALUE filing folders will arrive in New York today a Santa Clara Web-hosting 26 Sold stock Company’s worth change in value Has fallen 99.7 percent and be delivered straight to the offices of the firm, filed for bankruptcy. insiders $549 million -100% U.N. Monitoring, Verification and Inspection Commission (UNMOVIC), the agency set up Telecommunications Sold stock Company’s to ensure the disarmament of Iraq. equipment company 19 worth change in value ■ is in San Jose. insiders The next crucial stage will come when the $441 million -99.7% documents are handed over to the United States and other member states of the Clarent, a Redwood City 10 Sold stock Company’s Security Council, a step that could take firm, specializes in worth change in value several days. communications products. insiders $356 million -100% ■ The CIA and the national laboratories will analyze the report as soon as they obtain a K. B. Chandrasekhar copy, comparing it with intelligence 21 Sold stock Company’s Founder and former CEO Redwood City broadband insiders worth change in value information about Saddam’s known company filed for bankruptcy. $269 million -100% of Exodus Communications weapons projects before inspectors were HOWMUCHHESOLD withdrawn in 1998. Software firm Sold stock Company’s 6.8 million shares for is based in 13 worth change in value $135 million Redwood City. insiders $129 million -99.6% COMPANY’S VALUE Adaptive Broadband, Has fallen 100 percent KAITLYN’S Sold stock Company’s a Sunnyvale company, 8 worth change in value filed for bankruptcy. insiders $73 million -100% SPIRIT Gadzoox, a storage area Sold stock Company’s network firm, 18 INSPIRES worth change in value is based in San Jose. insiders $59 million -99.9% KINDNESS The Menlo Park software retailer filed 12 Sold stock Company’s for bankruptcy. insiders worth $40 million change in value -100% Offers of benefit CD, money David Peterschmidt given to girl with rare disease A MERCURY NEWS SPECIAL REPORT CEO of Inktomi HOWMUCHHESOLD By Linda Goldston 1.6 million shares for Mercury News $90 million Inspired by an 8-year-old Saratoga Public investors are the big losers COMPANY’S VALUE girl’s brave fight against a debilitat- Has fallen 99.8 percent ing disease, a music promoter hopes By Chris O’Brien and Jack Davis First in a three-part series tion and corporate governance. to turn her poem — ‘‘I Am the Same Mercury News ‘‘The people who bought the stock they Inside’’ — into a song, record it on a Running companies that became al- COMING TOMORROW sold are the victims here,’’ said Charles El- CD and unveil it at a benefit concert most worthless didn’t stop dozens of Sili- How insiders can reap enormous rewards son, director of the Center for Corporate in February. con Valley insiders from pocketing billions even when their companies tank. Governance at the University of Delaware. The CD and concert are the most of dollars by selling their stock during the ‘‘This money was taken from investors who unusual offers of help for Kaitlyn tech boom and bust. didn’t have the same information as these Langstaff, whose illness has left her The Mercury News examined the wealth from the pockets of thousands of insiders and lost their money.’’ unable to see, speak or eat everyday stock sales record of insiders at 40 com- anonymous investors — from day traders The Mercury News compiled a list of lo- food. But she also has received more panies in Silicon Valley that have lost vir- to pension funds — into the wallets of exec- cal companies whose stock price dropped than 150 letters with donations from $1 tually all their value since the stock mar- utives and directors who turned out to be at least 99.5 percent from March 2000, Thomas Jermoluk to $1,000 since her poem and her story ket peaked in March 2000. The execu- winners even when their companies be- when the Nasdaq peaked, to Sept. 30, 2002. Former CEO were published in the Mercury News tives, board members and venture came some of Silicon Valley’s biggest losers. Those companies were then ranked by the of Excite@Home on Thanksgiving Day. And total . capitalists at these companies walked off Coming at a time of public discontent amount of stock sold by insiders — roughly strangers have offered to repair her HOWMUCHHESOLD with $3.41 billion, while their companies’ with corporate ethics, the disconnect be- 300 — since the beginning of 1997. family’s damaged van and leaking roof. 1.9 million shares for F total market value plunged 99.8 percent tween the performance of these companies This means the list leaves off some $50 million ‘‘We are shell-shocked, just over- to a mere $229.5 million at the end of and the executives’ fantastic rewards is spectacular flameouts where executives whelmed by the response,’’ said Kait- September. symptomatic of the problems that have ig- COMPANY’S VALUE It represented a remarkable transfer of nited calls to reform executive compensa- See INSIDERS, Page 18A Has fallen 100 percent See KAITLYN, Page 14A High: 62-66 Rain possible. Books ...........22E Classified.........1CL Horoscope ........17E Movies ...........8E Perspective ........1P Business ..........1F Crossword........24E Lottery...........2A Obituaries ........15B Travel............1H Low: 42-46 Complete forecast, 16B Weather Index California News . 10-14B Dear Abby ........17E Miss Manners ......17E Opinion .........4-5P Weather.........16B Copyright 2002, San Jose Mercury News SJMN Operator: NN / Job name: XXXX0256-0018 / Description: Zone:MO Edition: Revised, date and time: 08/23/98, 21:55 Typeset, date and time: 12/07/02, 22:01 1208021MOA0A018 / Typesetter: IIIOUT / TCP: #1 / Queue entry: #0272 CYAN MAGENTA YELLOW BLACK 12/8/2002 MO A 18 18A WWW.BAYAREA.COM SAN JOSE MERCURY NEWS SUNDAY, DECEMBER 8, 2002 FROM PAGE ONE RICH MAN, POOR COMPANY | A MERCURY NEWS SPECIAL REPORT INSIDERS l Executives scored big while company values plunged Continued from Page 1A fore vaporizing following squab- bles with its main shareholder INSIDER SALES AT VALLEY COMPANIES THAT LOST VIRTUALLY ALL THEIR VALUE weren’t shy about selling stock. and partner, AT&T. Jermoluk is For instance, JDS Uniphase now a venture partner at Klein- These 40 Silicon Valley companies lost at least shares sold by directors, venture capitalists and other missed the cut, with a 97.1 per- er Perkins Caufield & Byers. 99.5 percent of their value from the end of the first major investors, as well as those executives deemed to be cent drop, even though execu- Executives at every company tives sold $1.17 billion in stock contacted either did not return quarter of 2000, when the Nasdaq market peaked, “insiders.” (Companies have leeway in identifying insiders, between May 1997 and Novem- phone calls or declined to com- through the end of the third quarter of this year. so the figures vary by company.) Some transactions on ber 2002, even as the optical ment, in many cases citing pend- components company was fir- ing litigation.