TELECOSM by GEORGE GILDER

Author:GEORGE GILDER
Language: eng
Format: epub
Tags: Technology
Publisher: Free Press
Published: 2000-07-15T00:00:00+00:00

PART FOUR

THE TRIUMPHAL TELECOSM

Chapter 14

The Rise of a Paradigm Star

For the last ten years, I have been looking for a successful heir to the Milken vision that launched such companies as MCI, McCaw, and TCI during the late 1970s and early 1980s. These were projects of a scale and inspiration that could change the shape of an industry, or even an economy. They were companies that became the best investment vessels of their time. But my search was in vain. As I expected, junk bonds surged back from their regulatory doldrums to become once again the nation’s most profitable investment—and Leon Black made a mint trading the Drexel portfolio—but no one used high-yield securities with nearly the creativity of the master.

Then in October 1998, I was invited to speak at an investors’ meeting in Cancún, Mexico, for a new fiber-optics communications company called Global Crossing. I had been impressed with its able execution of an ambitious business plan, installing fiber lines from New York to London—a venture called Atlantic Crossing—in ten months. But at the time, I did not realize that its founder, Gary Winnick, had played a key role in Milken’s career. I did not realize that Global Crossing had already issued $1,250,000,000 of junk bonds, gearing up the company’s equity into an entrepreneurial juggernaut like the Milken ventures. Discovering who Winnick was lent new glamour to the company.

Son of a vendor of restaurant gear who went bankrupt and died in his early fifties, grandson of a Jewish immigrant with a pushcart on the Bowery, Winnick shared with Milken a sense of mortality and mission. He also shared a sense of estrangement from the patrimonial paths of wealth that had been tread by many partners at Drexel-Burnham and Company.

At the time he first encountered Milken in 1973, Winnick was a burly young man with sideburns, a mustache, and an attitude, selling bonds to small banks and insurance companies for Drexel. A business graduate of C.W. Post in Long Island, his goal in life, inscribed on a note card he kept in his wallet, was one day to make fifty thousand dollars a year. “That would make me content,” he wrote. Milken taught him the possibility of discontent making close to $100,000 every day.

Winnick recalls his first impressions of Mike: “Other guys at Drexel-Burham were always getting up and gabbing, socializing. Mike had a tight-knit group working from seven to seven, with lunch in a bag, always buried in their phones, often two at a time. There was a tension in the room. By 1973, Milken’s presence permeated the company. A lot of people didn’t grasp what he was doing or why he was making so much money. They resented his influence.”

Selling high-grade corporate bonds at the time, Winnick one day early in 1973 received an ADP (automatic data processing company) printout of commissions. “It was fifteen times too high. I looked at it again and saw it was for one of Mike’s guys.” Winnick decided then and there that he was on the wrong side of the company.

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