Eddie Antar started a small electronic business in New York City in the year 1969. Antar dominated the NYC electronic markets around 1987 with 43 retail outlets, sales exceeding $350 million, and stock with a collective market value of $600 million. Antar personally realized more than $70 million from the sale of Crazy Eddie stock during his labor as the company’s CEO.
Crazy Eddie collapsed in the 1980s after several allegations of financial wrongdoing from behalf of Antar and his associates. Around November 1987, after the company’s takeover, the new owners found that crazy Eddie’s inventory was overstated by more than $65 million. Also, it was discovered that Antar and his people had overstated the company’s profits throughout its existence. …show more content…
However, most of these products were repaired by the manufacturer company, which led 100% of profit to his store in terms of repairs. Also, he began to work as a “trans-shipper”, selling the electronic goods to smaller retail stores nearby. These strategies were also accompanied by an extensive advertising campaign, and all together helped the rapid and enormous growth of the company.
Antar took the next step in 1983, and decided to sell Crazy Eddie’s stock. After finding some inconsistencies in Crazy Eddie’s financial statements, the underwriting firm suggested that those financial statements were cleaned before the initial public offering. It was also suggested the hiring of unrelated CFO, but Antar ended hiring his own cousin for the position.
In despite of these facts, the sale was very successful. The IPO was oversubscribed and the company was allowed to sell an additional 200,000 shares to the public. Then Antar focused and achieved to sell a strong and financially healthy organization. Positive review and notes were published and the financial statements of the periods from 1984 to 1987 (Exhibit 1 and 2) produced a giant increase in the stock prices. Investor who purchased stocks in the IPO realized more than 1000% in the value of their
Crazy Eddie collapsed in the 1980s after several allegations of financial wrongdoing from behalf of Antar and his associates. Around November 1987, after the company’s takeover, the new owners found that crazy Eddie’s inventory was overstated by more than $65 million. Also, it was discovered that Antar and his people had overstated the company’s profits throughout its existence. …show more content…
However, most of these products were repaired by the manufacturer company, which led 100% of profit to his store in terms of repairs. Also, he began to work as a “trans-shipper”, selling the electronic goods to smaller retail stores nearby. These strategies were also accompanied by an extensive advertising campaign, and all together helped the rapid and enormous growth of the company.
Antar took the next step in 1983, and decided to sell Crazy Eddie’s stock. After finding some inconsistencies in Crazy Eddie’s financial statements, the underwriting firm suggested that those financial statements were cleaned before the initial public offering. It was also suggested the hiring of unrelated CFO, but Antar ended hiring his own cousin for the position.
In despite of these facts, the sale was very successful. The IPO was oversubscribed and the company was allowed to sell an additional 200,000 shares to the public. Then Antar focused and achieved to sell a strong and financially healthy organization. Positive review and notes were published and the financial statements of the periods from 1984 to 1987 (Exhibit 1 and 2) produced a giant increase in the stock prices. Investor who purchased stocks in the IPO realized more than 1000% in the value of their