Grinch Levitt tries to spoil IPO’s Christmas

Even as Securities and Exchange Commission Chairman Arthur Levitt was warning against buying into initial public offerings, two Nasdaq IPOs were thumbing their noses at the silent Mars Polar Lander as they rocketed into the outer reaches of the solar system.

American depositary receipts of Jazztel PLC, a Spanish telecommunications company, soared well above the staff, more than tripling.

That was nothing compared with VA Linux Systems Inc., which was up 730% or so, from $30 to $220, as everybody tried to hop aboard the computer gravy train. Meanwhile, Linux employees brought in champagne and martini shakers. As one said, “Today is going to be a low-productivity day.” Who’d buy a company like that, especially with no profits in sight?

Certainly not Mr. Levitt, who said “I’m worried about investors making short-term judgments and firms [hyping]…hot new issues. I think it’s reprehensible.”

CPAwful

Cendant Corp. agreed to pay $2.83 billion to settle the largest shareholder class action in history. Bad beancounting in the merger of the former CUC International with HFS Corp. in 1997 sent the stock from $54 a share to its present $18.

Also mugged by accounting woes was Tyco International Ltd., which saw its stock fall 24% Thursday to around $28. The Securities and Exchange Commission announced that it was looking into whether all Tyco’s beans and Curad bandages add up.

Dennis Koslowski, the conglomerate’s CEO — it has picked up four dozen companies in two years — says he isn’t worried.

Gold bricks?

Citigroup and State Street Corp. are holding hands to skip down the CitiStreet, a joint back-office venture that hopes to be paved with $200 billion from pension and welfare plans by the Fourth of July. HQ will be in Quincy, Mass.

Somebody’s offside

Frank Zarb, who now heads the National Association of Securities Dealers, denied in state court in Newark, N.J., that he had lied in 1996 when he told former New York Giant Phil McConkey in a hiring interview that the insurance brokerage he then headed was not for sale. Eight months later, Aon Corp. of Chicago bought Alexander & Alexander Services Inc., and three months after that Mr. McConkey was handed his helmet.

Happy knight

Sir John Templeton, even at age 87, is more used to giving awards than getting them, knighthood excepted, but the founder of Templeton Funds Group and the big-bucks Templeton Prize in religion is the first recipient of something called the Pioneers in Investing from Salomon Smith Barney’s Consulting Group. Sir John, old-timers may recall, pushed overseas stocks 45 years ago at the height of the Eisenhower boom with the world’s first global growth mutual fund, to the sneers of many.

He sold his Templeton Funds Group and its $22 billion under management seven years ago to Franklin Advisers Inc. He said he’s honored by the award — and didn’t ask if there’s any money involved.

It wasn’t a blast

The Philadelphia Stock Exchange was closed for a half-hour Thursday by a bomb scare…Japanese officials are moving against Credit Suisse First Boston on grounds of non-cooperation in a fraud probe…The Federal Reserve Board thumbs-upped the merger of HSBC Holdings PLC with Republic New York Corp…Merrill Lynch & Co. Inc. expects record profits next year, helped by its grand entrance into commercial banking…Meanwhile, it was reported bank trading revenues fell to $2.14 billion in the third quarter, from $2.17 billion in the previous three months. Maybe Merrill could help.