Fatal Error

by Michael Ridpath

  To my relief, there was no sign of Owen.

  The IPO required a massive amount of preparation, especially on the accounting systems and the legal documentation. There was a prospectus to be written and checked and rechecked. Much of this work fell on me. Mel was a great help, and we spent long evenings together going over obscure points.

  My father called, proposing lunch at Sweetings. I had blown him off the last two times he had suggested it, so this time I agreed. Besides, I had good news for him.

  They had heard of dot-com fever in deepest Northamptonshire. Even the Daily Telegraph was reporting it excitedly. So my father could hardly wait to ask me how Ninetyminutes was doing.

  ‘It looks like we’re going to float at the end of the month,’ I said.

  ‘No! You haven’t been going a year yet.’

  ‘I know. Absurd, isn’t it?’

  ‘I didn’t even realize you were making profits.’

  ‘We’re not.’

  My father shook his head. ‘The markets have gone mad,’ he said as he tucked into his dressed crab. But he couldn’t keep the smile off his face.

  ‘They have. But I’m not complaining.’

  ‘So, um, how much …?’

  ‘How much will your stake be worth?’

  ‘Er, well, yes. I was wondering that, actually.’

  ‘If the shares come out at anything like the level the bankers suggest, about nine hundred thousand pounds.’

  My father choked on his crab. He began to cough, went bright red, and took a desperate swig from his half-pint tankard of Guinness. Eventually he recovered. ‘Did I hear you right?’

  ‘I think you did.’

  A broad grin spread across his face. ‘Well done, David. Well done.’

  I couldn’t help smiling back myself. I was proud to have repaid his faith in me so handsomely. I knew what really delighted him wasn’t just the money, but the fact that it was his son who had made it for him. What I hadn’t told him was that my own stake would be worth just under ten million pounds.

  ‘Don’t count the cash until you’ve sold your shares,’ I cautioned. ‘And certainly don’t spend any of it.’

  ‘Of course not,’ said my father. And then, ‘Well, well, well. I think the time has come to come clean to your mother.’

  ‘Haven’t you told her yet?’

  ‘No,’ said my father, looking a little embarrassed. ‘She might not have approved. But she’ll have to, now, won’t she?’

  ‘I suppose she will.’

  I returned to the office to find it in full panic. I could tell it was a technology-related panic, because everyone was standing around Sanjay’s desk looking anxious, while he was frantically tapping into his computer and trying to communicate with his staff through the bodies around him.

  ‘What’s up?’ I asked Ingrid.

  ‘Goaldigger has been attacked by a virus.’

  The goaldigger.com website was one of our biggest competitors. It had been active a year longer than us and had more visitors, but we were catching them up quickly.

  ‘What kind of virus?’

  ‘Apparently it’s been spitting out e-mails to all Goaldigger’s registered users. Look.’

  She handed me an e-mail. It was addressed to Gaz, who had presumably been keeping tabs on the opposition.

  Virus Alert

  Please be aware that a virus has been detected in the goaldigger.com system. This virus may be able to access the computers of Goaldigger registered users and might download private information, or even corrupt customers’ hard disks. Customers are advised not to log in to the Goaldigger website or open e-mails from Goaldigger. We apologize to those customers who have lost significant personal data as a result of this virus.

  The Goaldigger team

  ‘This sounds strange,’ I said.

  ‘It is. It’s a hoax.’

  ‘You mean there’s no virus?’

  ‘There is a virus. But a simpler one. It just sends this e-mail to all Goaldigger’s customers scaring them off the site. It’ll take Goaldigger weeks to repair the damage to their reputation, if ever.’

  ‘What a shame,’ I said with irony. The hard truth was that bad news for Goaldigger was good news for Ninetyminutes.

  Ingrid looked at me sternly. ‘If someone’s done this to Goaldigger, they might do it to us next. Guy wants to be sure that we’re not vulnerable.’

  ‘We’ve got firewalls and anti-virus software and stuff, haven’t we?’

  ‘Yeah, but presumably they had all that too.’

  Sanjay was pretty sure that we had protection against a similar attack, but he monitored our system constantly over the next few days to make sure. Goaldigger did try to get the message out to its customers that the whole thing was just a hoax, but there was no doubt that the episode did them damage. No one found the perpetrator.

  Guy, Ingrid and I decided to take an evening off to attend the March First Tuesday event. They were keen to have us. In the internet world we were already billed as a success story before we had even made our first profit. The event was held in the auditorium of a theatre, specially cleared for the occasion. There were queues to get in and pandemonium once we got there. I felt very different than I had last time: much more secure in who we were and what we were doing. As last time, there were hundreds of eager entrepreneurs with ideas. But even more of these ideas were half-baked. In the case of some of them, no one had even turned on the oven. There was also a new kind of venture capitalist circling the room: the ‘incubators’. These were young men or women who had raised money to invest in internet companies at the earliest stage: the equivalent of the Wapping phase in Ninetyminutes’ history. They were scarcely less flimsy than the companies in which they were investing, but somehow they had attracted cash and they were throwing it about. They made the thirty-year-old Henry Broughton-Jones look like a dinosaur.

  Everyone had a story about one success or another, but the big story on everyone’s lips was lastminute.com, run by the woman I had met at my first First Tuesday. This was a website which provided tickets at the last minute for anything ranging from air travel to theatres to sports events. They were in the middle of an IPO, and the investing public were fighting for shares. The flotation price had just been raised again, valuing the company at nearly five hundred million pounds. Everyone in that room wanted to be as successful as lastminute and most of them thought they could be. Even, I’m ashamed to say, me.

  After a couple of hours of frantic schmoozing, the three of us met up.

  ‘What a zoo!’ Ingrid said.

  ‘Can you believe these people?’ said Guy.

  ‘That’s where we were nine months ago,’ I said. ‘I didn’t believe it would last then. But it has. It’s grown. Lastminute is worth five hundred million. We’ll be worth a hundred and eighty. It really is a new economy after all.’

  ‘I told you, didn’t I, Davo?’ Guy said. ‘You should have had faith in me.’

  ‘I did have faith in you!’

  ‘Yes, I suppose you did.’ Guy smiled at me. Then he looked out over the throng. ‘I wish Dad could have seen this.’

  ‘He would have been proud of you,’ I said. Actually, I thought it more likely he would have been envious, but I didn’t want to mention that. Nor did I want to ask any more questions about his death. I had asked enough questions and found out as much as I was ever going to on that subject. Although I still didn’t know what had happened to Tony, I was convinced of Guy’s innocence; Owen was gone and I had told myself to be satisfied with that. Besides, if Guy could feel better about his father, that was a good thing.

  We left the throng and went our separate ways. I walked down a side-street looking for a taxi. Guy and Ingrid went the other way. I waited at a corner, and nothing came, so I doubled back, trying to find a better spot for a cab.

  I saw them together on the pavement. They were waiting for a taxi too. They were very close together. It looked as if Guy had his arm round Ingrid’s waist. I could hear
Ingrid’s laugh ringing up the side-street towards me.

  I stopped still and watched them. They didn’t see me. Suddenly I felt cold. The comfortable glow of internet success left me.

  I turned on my heel and walked all the way home.

  I slept little that night. The next morning I asked Ingrid to join me for a coffee. She agreed, and we headed for the place round the corner.

  ‘I wonder how many of those people last night will actually get funding,’ she said as we stepped out into the street.

  ‘Not many, I hope,’ I replied uncharitably.

  ‘I met a guy from QXL, you know, the auction site?’

  I grunted. Ingrid went on.

  ‘It’s an amazing story. They floated in October with a market cap of two hundred and fifty million, and now they’re worth nearly two billion. Can you believe that? I knew they were doing well, but I didn’t realize it was that well. And all from selling knick-knacks over the Internet.’

  I grunted again. We entered the coffee shop and ordered.

  ‘OK, out with it,’ she said as we sat down with our cappuccinos. ‘Something’s bugging you and you want to talk to me about it. By the look of you, it’s bugging you pretty badly.’

  ‘Oh, it’s nothing really.’

  ‘Come on. What is it?’

  I looked her straight in the eye. ‘Are you sleeping with Guy?’

  Ingrid appeared genuinely shocked. She put her cup down. ‘Am I what?’

  ‘You heard me.’

  ‘No. No, I’m not.’

  ‘It’s just, I saw you last night.’

  ‘And I saw you,’ she said defiantly.

  ‘I mean I saw the two of you. Together. Getting a taxi. Together.’

  ‘So what? I got in one and then he got in another.’

  ‘Oh, I see,’ I said.

  ‘Don’t you believe me?’ It was a challenge. Ingrid did not like having her honour questioned.

  ‘Yes. Yes, of course I do. It’s just, he had his arm around you. You were together. I’ve seen Guy with women. I know what happens.’

  ‘I said we went home in different taxis.’ She was getting angry now.

  ‘OK, OK.’ I held up my hands to calm her down. ‘It’s got nothing to do with me, anyway.’

  ‘Too right,’ muttered Ingrid. She swallowed the rest of her coffee and checked her watch. ‘Well, if that’s all it was, we ought to get back to work.’

  Our IPO approached. Lastminute.com shares were priced at three hundred and eighty pence. On the first day of trading, desperate investors bid the price up to five hundred and fifty. That meant lastminute was worth over eight hundred million pounds.

  I spoke to Bloomfield Weiss. They said they felt a valuation of two hundred million for Ninetyminutes was definitely achievable now, maybe even two hundred and fifty if the stock market’s exuberance continued. We’d get a better idea when the roadshow started the following week.

  Then Derek Silverman called Guy. He had just received a phone call from Jay Madden, the head of Champion Starsat Sports. Madden wanted to meet Guy the next day. He had a suggestion he wanted him to listen to.

  That could mean only one thing.

  We met at the Savoy for breakfast. Guy insisted on bringing me along, for which I was grateful. Jay Madden was a forty-year-old South African with an American accent and business manner. He began by discussing Chelsea’s performance in the Premier League. A good move. He wanted to show us that although he was South African he knew his English football. He then slid into a quick description of Champion Starsat’s sports strategy. Basically, they wanted to own it, especially football. They were a long way towards this as far as TV was concerned, but nowhere when it came to the Internet. This didn’t bother Jay: he was sure he had plenty of time. He could either start his own site, or buy one. He liked ours.

  I could feel my pulse quickening. This was real. This was going to be big money.

  ‘How much?’ asked Guy simply, biting into a croissant.

  ‘A hundred and fifty million pounds,’ said Jay.

  ‘Cash or stock?’

  ‘Stock. With a lock-up. We want to keep you people around.’

  ‘Not enough,’ said Guy immediately. ‘We can get two hundred and fifty million at the float next month.’

  ‘I’m not nickel and diming you this morning,’ Jay said. ‘We can do that next week. But what do you think about the idea in principle?’

  Guy munched his croissant. Then he took another bite. This was a big decision. It might take him a whole croissant to get through this one.

  ‘No,’ he said.

  No?

  ‘No? Just like that?’ Madden looked unhappy.

  ‘Ninetyminutes is doing well as it is. There is a role for an independent soccer website to dominate Europe. That’s going to be us. And the stock market will put a value on that. A value much higher than a hundred and fifty million pounds.’

  ‘But we can give you everything you need,’ said Madden. ‘Cash for expansion, plenty of outlets for promotion, contact with the clubs and the football associations.’

  ‘Oh, I know you’ll do well,’ said Guy. ‘And I’m not looking forward to having you as a competitor. But working for Champion Starsat isn’t why I started Ninetyminutes. It’s not why any of us work there. And it’s not why people come to our site.’

  ‘Are you sure this isn’t just about money?’ Madden asked.

  ‘Quite sure,’ said Guy.

  Madden tucked into his sausage. ‘You’re not going to like us competing with you.’

  ‘I know,’ said Guy, staring steadily at Madden. Letting him know he wasn’t scared of him.

  ‘We could make you very rich.’

  ‘I intend to be very rich anyway,’ said Guy. He poured himself some more coffee. ‘Do you think Arsenal will catch United in the League?’

  The board was waiting for us back at Ninetyminutes: Derek Silverman, Henry Broughton-Jones and Ingrid. Guy explained to the others Jay Madden’s proposal.

  ‘Wow,’ said Henry.

  ‘You were just trying to get the price up, right?’ I said.

  ‘No,’ said Guy. ‘I meant what I said. I think we should stay independent.’

  ‘But a hundred and fifty million!’ I said. ‘That’s got to be worth taking now.’

  ‘It’s in Champion Starsat stock, remember,’ said Silverman.

  ‘Better that than Ninetyminutes stock, quite frankly.’

  ‘The whole ethos of everything we do is based on independence,’ said Guy. ‘Our relationships with the clubs, our internet partners, our editorial policy. It’s how we’re going to succeed. Of course Champion Starsat will have a good site that a lot of people will want to see. So will the BBC. But ours will be better.’

  ‘But with their cash we can make our site better,’ I said.

  ‘Davo, don’t go all chartered accountant on me.’

  ‘That’s not fair.’

  ‘I want to make Ninetyminutes the number-one site in Europe. We’re almost there. And Henry,’ he looked pointedly at the venture capitalist, ‘when we are, we’ll be worth a lot more than a hundred and fifty million quid.’

  ‘That was just their first shot,’ I said. ‘They’ll go higher.’

  ‘So will the stock market. Tell him what value Bloomfield Weiss thought we might get, Davo.’

  ‘Two hundred million,’ I said grudgingly. ‘Perhaps two fifty.’

  ‘And it will go up after that,’ said Guy with total confidence. ‘Hang on in there, Henry, and I’ll make you some real money.’

  ‘A hundred and fifty million quid is real money,’ I said. I was being outmanoeuvred and I disliked it. I still couldn’t believe that Ninetyminutes could be worth anything like twenty million pounds, let alone two hundred, despite all the hype. Guy was right, and that annoyed me: I was a chartered accountant. The numbers didn’t add up. This was a great opportunity to get out while the going was good.

  ‘Let’s go around the table and see what people thin
k,’ said Silverman in his chairman’s role. ‘Who’s in favour of talking to Champion Starsat? Guy, I take it, is a no.’

  ‘Definitely not.’

  ‘And David?’

  ‘Yes.’

  ‘Henry?’

  Henry Broughton-Jones paused. He was smiling. You could almost see the greed around his lips. He wanted more, I could tell he wanted more, and Guy was offering it.

  ‘I think we should tell them we mean no,’ he said. ‘I have a very good feeling about Ninetyminutes. I think we would be selling it just before it takes off.’

  ‘Ingrid?’

  I looked at Ingrid hopefully. I knew she had common sense. I could see I was going to lose this one, but it would be nice to have her on my side.

  ‘I agree with Guy,’ she said. ‘If we stay independent, we could well end up with a higher valuation. Besides, I like this company as it is. I don’t want to work for Champion Starsat.’

  I was disappointed. Why was Ingrid supporting Guy and not me? Was it because … No, I’d drive myself crazy thinking like that. But if Ingrid was sleeping with Guy, then should I expect future disagreements to go this way?

  ‘Well,’ said Silverman. ‘For myself, I think there’s a right price for everything, even Ninetyminutes. But if the Chief Executive and the lead financial backer don’t want to sell, then that’s pretty conclusive to me. I’ll tell Jay.’

  ‘If they start up a site, we’ll cream them,’ said Guy, rubbing his hands.

  I left the room in a foul mood.

  31

  The bubble was bursting.

  We didn’t realize it immediately. To start with it looked like a temporary correction, a pause for breath while the market regained its strength to climb even higher. Within a few days of launch lastminute’s shares slipped under three pounds, well below the issue price. Thousands of individual investors were sitting on a loss. And NASDAQ, the American high-technology stock exchange, fell steadily as the month progressed.

  Guy and I didn’t notice, and although the people at Bloomfield Weiss must have done, they didn’t tell us. At least, not at first. We embarked on our roadshow. Amsterdam went well, as did Paris, and the fund managers almost bit our hands off in Frankfurt. We had practised our presentations to death in front of our PR firm. Guy did an excellent job of extolling Ninetyminutes’ prospects, and I swallowed my pride and did my best to come across as a safe pair of hands. Sanjay was there to answer any technical queries. It was clear from the questions that not all the potential investors understood the intricacies of the Internet, but most of them knew something about football. And they understood, or thought they understood, that if you bought shares in markets that just kept on going up and up, you were bound to make money.