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   Technology Stocksdivine interVentures, Inc. (DVIN)


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To: Edwin S. Fujinaka who wrote (96)6/18/2000 1:41:00 PM
From: Glenn Petersen
   of 246
 
Flip gets front page treatment in today's Chicago Tribune:

chicagotribune.com

Tech haven vision rides on
'promoter' Andrew 'Flip'
Filipowski

By Rob Kaiser
Tribune Staff Writer
June 18, 2000

It was the winter of 1986 when Andrew "Flip"
Filipowski finally made it to Harvard.

The school had rejected his application years earlier, but
now Filipowski was the 35-year-old head of a hot
Chicago software company.

All week at an executive-training program, he peppered
the professors with witty remarks and novel takes on the
school's famous case studies. Even the Harvard
Business School elite had to concede that the Polish guy
from Chicago had something on the ball.

But Filipowski wasn't finished. At the closing dinner, he
popped up and told the b-school professors he could
turn their lives around. It was simple: Buy out Harvard
Business School. Professors would rule, and the
administrators would work for them.

At the time, everyone laughed. But nobody's laughing at
Filipowski's wild ideas today.

Now the college dropout with the ponytail,
diamond-stud earring and flowered Hawaiian shirts is
looking to turn Chicago into a high-tech haven.

At 49 years old, he still knows how to work a crowd.
And his ability to make his grand plans sound like the
next big thing has, for better or worse, installed him as
the face of Chicago's fledgling dot-com community.

Whether that's a good thing is set to be tested in coming
days as Filipowski offers stock to the public in his latest
big vision.

It's called Divine Interventures Inc., a new-economy
conglomerate that invests in Internet firms. And Chicago
has seen nothing like it before.

But Filipowski's plan for a splashy public offering is
loaded with peril. The market for these ventures has
soured and one of his leading advisers has warned him
to back off.

If his company flops, Filipowski will not flop alone. A
glittering lineup of investors stands to suffer as
well?from Michael Jordan to the heir to the Wrigley
fortune.

Moreover, Chicago's effort to emerge as a high-tech
center in the same league as San Francisco, Boston or
New York would be undermined, perhaps for good.
That would confirm the city's image as a backwater for
the fastest-growing part of the economy.

It's all riding on a guy with an uneven track record, who
was demoted at one company, kicked out of another
and wooed into selling a third after promising he would
keep it.

"Flip is a wonderful promoter, but I'm not sure he's a
good investor," said Len Batterson, chief executive of a
Chicago venture capital company. "There's a certain
danger in that. If [Divine] doesn't make it, it's a
high-profile failure" for technology in Chicago.

If the past is any indication, what happens to Divine
won't change a thing about the man himself: Filipowski
will remain a flamboyant collector of everything from
multimillion-dollar homes to vintage comic books. He
will continue to seek out extreme business risks, thinking
nothing of putting on the line his own reputation and the
livelihoods of his employees.

"You can back off and melt into the background," said
Filipowski. "Or you can step forward, hang a bull's-eye
on your chest and take the good with the bad."

At least Filipowski is no interloper. He grew up on
Chicago's Near West Side, sweeping up at his father's
grocery stores, though never well enough to satisfy his
dad's standards. His parents, Polish immigrants, pushed
him to achieve.

His father often recited a Polish expression, which
Filipowski translated: "No matter how people want to
sugarcoat it ... in their minds, they will absolutely be
thinking that if you're poor, you're stupid and if you're
stupid, you're poor."

His first brush with wealth came in the eighth grade, at
the exclusive St. John's Military Academy in Wisconsin,
a private boarding school where he lived with children
from wealthy families.

"I felt that if these kids could be rich, as stupid as they
were, this truly was the land of opportunity," he said.

After finishing at the top of his St. John's class,
Filipowski applied to Harvard and Yale, expecting to
get into one or both schools, but the Ivy League
institutions rejected him. He returned, heartbroken, to
Chicago and enrolled at the University of Illinois at
Chicago, dropping out a year later.

Despite the setback, his first wife, Janet Filipowski,
recalls he "had this flair about him." Filipowski took her
to fancy restaurants and brought her flowers on every
date. She fell in love with him, she says, because he
cried when they saw the movie "Love Story." About six
months after they met, he proposed.

Filipowski launched his career in the computer
equivalent of the mailroom. He worked the 4 p.m. to
midnight shift at the Time-Life Building on Michigan
Avenue, changing printer paper and feeding punch cards
into the primitive machines. During breaks, he would
sneak into Time's video library, where he taught himself
COBOL and other programming languages.

His talent for technology became apparent when he was
hired at Motorola Inc. as a computer programmer. The
19-year-old Filipowski and another young programmer,
Ray Nawara, would speed-read technical manuals and
make cutting-edge computing look like "child's play,"
said Bob Pappas, who supervised the pair. "I've never
seen anything like it before or since."

Filipowski's career took off.

After a stint at A.B. Dick Co., he reunited with Nawara
at Cullinane Software of Boston, where ace salesman
Filipowski rose to become chief operating officer.

As the company prepared to go public in 1978, founder
John Cullinane wanted Filipowski to pitch the firm to
potential investors.

"Flip would get up and say almost anything," Cullinane
said. "If it turned out he was wrong, it didn't seem to
faze him. He would go on."

But Filipowski went too far?a habit that would hurt him
later in his career, too.

He devised a plan to split the company into three parts,
even though the firm had just told a much different story
to investors.

Cullinane wasn't pleased. "He came on so strong and so
aggressively, I had to rein him in ... and send him back
to Chicago," he said.

So Filipowski returned to his hometown, quit his
$100,000 job at Cullinane and started his own firm.

"I remember feeling like I was sweating at the same time
I was taking a shower," said Filipowski, recalling the day
he left Cullinane. But the break also was liberating, he
said."You could cross that boundary of being scared
and go ahead and do something rather than retreat from
fear."

The company Filipowski started, DBMS Inc.,
specialized in what he wanted his former employer to
do?develop software applications, education and
consulting services for the Cullinane database system.

Joined by his friend Nawara, Filipowski installed in
DBMS a culture similar to those in today's Internet
start-up companies?spurning business attire,
centralized authority and the 40-hour workweek. At 10
p.m. most weeknights, Filipowski and most of his
employees were still at the office.

"His mind was working 24 hours a day," Janet
Filipowski recalls. "He'd wake up in the middle of the
night talking computers. I would poke him in the ribs and
say, 'Be quiet. I don't understand one word you're
saying.'"

Filipowski and Nawara were inseparable, often traveling
together to Las Vegas, where Filipowski displayed a
penchant for gambling and breaking rules.

On one trip, Filipowski approached a $5 blackjack
table and plunked down a bet of several thousand
dollars. When the dealer said he couldn't cover it,
Filipowski glanced over at the pit boss, who instructed
the dealer to disregard the rule.

DBMS expanded to 450 employees, but its spending
grew even faster. Steep salaries, research and
development, and expensive office space forced
Filipowski to fire 100 employees.

At the same time, Filipowski began clashing with
Nawara. Filipowski wanted the company to focus on a
new IBM database product, while Nawara thought it
should stick with the Cullinane system. The disagreement
became personal.

In one incident, the pair sat at different tables during a
company dinner in the Bahamas. Each started ordering
more and more expensive dishes and drinks off the
menu, upping the ante with items like Napoleon brandy.
"Each wanted to see who could outspend the other,"
said Pappas, who had become a DBMS executive. "It
got to be absurd."

Several former DBMS employees said Nawara
resented being thought of as the lesser partner in the
company and began bad-mouthing Filipowski to others
at the firm.

In November 1986, Filipowski took the problem to the
board of DBMS, which agreed that Nawara should be
fired.

But Nawara didn't stay away. With the support of new
investors, Nawara returned to the offices of DBMS four
months later and, in a kind of corporate coup, took
over.

When Filipowski arrived at work, he was ordered to
leave and security guards escorted him from the
premises.

Once as close as brothers, Filipowski and Nawara have
barely spoken since their fallout. Nawara declined to be
quoted in this article.

Most people who talked with Filipowski after he was
kicked out of DBMS remark on his resiliency, about
how he barely let the event affect him.

But his wife had a different impression.

"That's when he changed," Janet Filipowski said. "He
put a shell around himself. I think he was hurt so badly
by it. And he was more determined than ever to make a
big, successful company."

Filipowski called on rich friends to fund his new
company, Platinum Technology International Inc.

"I really wondered if he was going to make it," said Art
Friego, a friend of Filipowski's who was among the early
investors. "I never expected to get any money back."

At the same time, Filipowski's marriage was coming
apart. Janet Filipowski's reaction to the DBMS debacle
contributed to the problem. "I told him to get a real job,"
she said. "He never forgave me for saying that."

Filipowski's new company, which he started in the
basement of his Lisle home, made and sold software to
support the databases that companies use to conduct
their routine business operations, such as payroll,
inventory and marketing.

But DBMS, which had a similar product and mission,
filed a lawsuit against Platinum, Filipowski and other
former DBMS executives. The lawsuit asserted a variety
of wrongdoing by Platinum workers, such as stealing
DBMS' employees and customers.

Filipowski denied then?and still denies?the allegations
in the lawsuit. But to settle the case he gave up his entire
remaining stake in DBMS, which was worth millions.

Freed of that legal burden, he focused on Platinum,
convincing employees that it was bound for greatness.

"Flip would walk into a room and start talking and you
would think we were an enormous company," although
at the time it had only about 200 employees, said Corey
Ferengul, Platinum's director of product integration. "It's
kind of a Knute Rockne effect."

Filipowski's expensive tastes were reflected in the annual
retreats for the company's top salespeople he held at the
best hotel in Maui.

A concierge service sent flowers, ordered theater tickets
and even planned weddings for employees. People who
adopted children could take time off and receive $5,000
in assistance. Employees could even get pet insurance.

Filipowski worked tirelessly. He went on calls with
salesmen, spent days with customers and participated in
technical meetings that sometimes lasted 16 hours. "He
would be there for every minute," said Mark Fetherolf, a
Platinum executive. "I've never seen anybody make that
kind of management style work the way he did?not
micromanage, but get into every corner of the
company."

Once a rumor spread through the company that Platinum
employees in Asia had started wearing more formal
attire to conform to the local business culture.

"He left this message that said, 'If anybody in this
company tries to do this I want to hear about it. It's not
going to happen here,'" Fetherolf recalled. "He got so
much mileage out of that, [especially from] the engineers.
These guys wanted work and lifestyle and all that to be
integrated, and he was their champion."

Around 1992, the database market began to shift.
Companies began to scrap mainframe computers in
favor of client-server systems, in which employees at all
levels were given greater access to corporate
information.

The movement spurred consolidation among
softwaremakers and set off a round of acquisitions and
mergers in the industry. Filipowski was left with a
decision: whether to unload Platinum to the highest
bidder or become an acquirer himself.

He charged ahead, gobbling up smaller software
companies?often paying top dollar. And to inspire his
employees, Filipowski vilified Platinum's competitors.

Computer Associates, a software company that was
growing even faster than Platinum, emerged as enemy
No. 1?a cheap, uncaring corporate behemoth, in
Filipowski's view.

Platinum employees followed Filipowski's lead. They
made fun of Computer Associates executives and
flaunted T-shirts that read, "Friends don't let friends buy
from CA."

But when Platinum ran into trouble in 1998, missing its
quarterly earnings estimates, Filipowski changed his
view of CA.

The earnings shortfall was partly due to a delay in
completing an important new product. The high spending
hurt, too: Revenue per employee at Computer
Associates was about three times the $129,000 revenue
per employee at Platinum.

Platinum's stock tumbled from more than $30 to under
$10 per share, making the firm a prime target for a CA
takeover.

To his employees, Filipowski's attitude toward CA
seemed the same as ever. On more than one occasion
he swore that he would never sell the company.

Still, when Sanjay Kumar, the president of Computer
Associates, called to arrange a meeting in the spring of
last year, Filipowski agreed.

Over dinner in a restaurant near Filipowski's sprawling
North Carolina home, Kumar offered to buy Platinum's
stock for nearly three times its going price.

Filipowski said he at first said no, saying the deal could
fly only if Computer Associates took the unheard-of
step of putting several billion dollars in an escrow
account and promising to let Platinum keep the money
even if antitrust regulators stopped the acquisition.

"He reached across the table and said, 'Done deal,'"
Filipowski recalled. Kumar couldn't be reached for
comment.

At the time, the $3.5 billion deal was the largest sale
ever for a software firm. Filipowski, who personally
pocketed about $290 million, expressed little remorse
about going back on his earlier statements, saying that in
the end he had no choice.

Soon after the sale, Filipowski launched Divine
Interventures.

Employing his marketing panache, Filipowski billed
Divine as an "Internet zaibatsu," a reference to corporate
clans that built Japan into an imperial power before
being banned after World War II.

The fanfare worked, as the riches from the Platinum deal
and the boom in technology stocks made Divine an easy
sell. Filipowski quickly raised $400 million.

Microsoft Corp. was an early backer of Divine, as were
Dell Computer Corp., Compaq Computer Corp.,
Hewlett-Packard Co. and Chicago's Aon Corp.
Numerous local businessmen, many Filipowski's
personal friends, also invested in Divine. (Tribune Co.,
which owns the Chicago Tribune, has a $2 million stake
in the company.)

The city joined the excitement over Filipowski's new
enterprise, contributing $14 million in tax increment
financing for Divine's planned Goose Island
headquarters campus. Last December, Mayor Richard
Daley and Filipowski held a joint press conference at
Goose Island, where the mayor announced how the city
planned to become a "high-tech hub."

Promoting Divine, Filipowski spoke at business forums
throughout Chicago declaring that the city's corporate
elite needed a swift kick to join the new economy.

While the speeches sounded impressive last fall, they
ring a little hollow now as the red-hot technology market
has cooled.

The tech-heavy Nasdaq stock market is trading 25
percent below its record high in March, and investor
interest in speculative technology ventures has declined
sharply.

Divine, which had rapidly grown to more than 750
employees, laid off 29 people last month because of a
slowdown in deals. Construction at its $62.9 million
Goose Island campus, which was originally scheduled to
open this fall, has been delayed and could be canceled.
Like many Internet companies, Divine has never posted
a profit.

As investors have soured on technology stocks,
Divine-style "incubators" that nurture Internet start-up
companies have been hit especially hard. Two similar
companies elsewhere that have already gone public,
CMGI Inc. and Internet Capital Group, this year have
seen their stocks plunge 66 percent and 85 percent,
respectively.

Divine also faces an increasingly crowded field as
hundreds of existing and new companies start incubators
around the world.

"A year from now there will be blood in the streets,"
predicted Charles Rutstein, an analyst with Forrester
Research. "There's too much money flowing into these
things."

Divine's lead investment banker, CS First Boston, tried
to postpone the company's stock offering until the
climate improved.

Filipowski's response reflected the gung-ho attitude that
has marked his entire career: He fired CS First Boston
and replaced it with another firm that was willing to be
more aggressive.

Then Filipowski and the new firm, San Francisco-based
Robertson Stephens, jacked up both the price of the
shares and the total amount of cash to be raised in the
initial public offering, from $140 million to $200 million.
The IPO could give insiders a chance to unload some of
their stock for a profit after a mandatory waiting period.
Filipowski declined to comment on the pending public
offering.

To some, the plan to proceed with the offering sounds
almost as dicey as the quip long ago to buy out Harvard
Business School.

Those who know Filipowski see the rush to market as
almost inevitable, given his hard-charging style and the
get-rich-quick culture of Internet enterprises.

Now the stock market is due to weigh in on whether
Filipowski has what it takes to lead corporate
Chicago?belatedly?into the on-line Gold Rush.

Tribune reporter Ray Gibson contributed to this
story.

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To: Glenn Petersen who wrote (98)6/20/2000 11:32:00 PM
From: Glenn Petersen
   of 246
 
From today's Chicago Sun Times:

Divine interVentures to offer shares soon

June 20, 2000

BY HOWARD WOLINSKY BUSINESS REPORTER

The much-anticipated public share offering for divine interVentures, the
Lisle Internet holding company, has been scheduled for next Monday or
Tuesday, according to federal securities filings.

Another Chicago tech company, Click Commerce Inc., also is planning its
initial public offering next week, sources said. Only one tech company,
Coolsavings.com, has gone public here since March, when prices of
technology stocks slumped, and the IPO market turned hostile.

In recent weeks, however, the market for tech stocks has become
substantially more hospitable, and Monday's 129.27 point gain in the
Nasdaq brought the index to within 90 points of wiping out all its
losses for the year.

Divine plans to sell 14.3 million shares at $13 to $15 to raise up to
$214 million.

Divine, founded by software mogul Andrew J. "Flip" Filipowski, is
bucking the trend at a time when many tech start-ups have postponed or
withdrawn IPOs.

Filipowski recently fired his lead investment bank, Credit Suisse First
Boston, which didn't want to take divine public until the fall. But
Credit Suisse this week is scheduled to take public Handspring, a
competitor to Palm.

Robertson Stephens Inc. will lead the divine IPO, which will take place
just before the Federal Reserve Bank decides whether to raise interest
rates, an event that can affect the stock market.

Filipowski, who is on a "road show" now to promote the offering to
influential investors, told the Chicago Sun-Times earlier that Robertson
Stephens and other affiliated lenders think divine "will stand out as a
quality deal in a period of time when there is a lot of uncertainty in
the marketplace and only the best of the best companies really should be
going public."

He said his company is "burning" cash at a rate of $5 million a month
and has about $100 million on hand.

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To: Glenn Petersen who wrote (99)6/24/2000 2:40:00 PM
From: stockman_scott
   of 246
 
This is one that I will watch from the sidelines...

DVIN has had to try to re-invent itself recently....incubators also seem to continue to be out of favor.

At the moment I prefer the infrastructure firms (like SEBL) that have proven business models and are already profitable.

It would be nice for Chicago if DVIN performs better than many expect. Yet, in the MidWest there are many other successful Venture firms and early stage technology firms outside of the Divine umbrella.

The next week will be interesting.

Best Regards,

Scott

BTW, if I had the right to buy DVIN shares at $1/share (like Michael Jordan) I probably would invest...;-)

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To: Glenn Petersen who wrote (99)6/27/2000 12:41:00 PM
From: Edwin S. Fujinaka
   of 246
 
This item was posted to the Softbank Board of Raging Bull and might indicate how Divine Interventures could be structured as part of Softbank's Empire. Perhaps DVIN could be the Chicago version of I-Group HotBank NE, a Boston Internet Incubator:

ragingbull.com

By: high.hopes
Reply To: None Tuesday, 27 Jun 2000 at 12:04 AM EDT
Post # of 4805


What It Takes to be an Entrepreneur in the Net Economy

Monday June 26, 10:15 am Eastern Time

BOSTON--(BUSINESS WIRE)--June 26, 2000--Markets are falling and Internet companies are starting to close down as ``dot.com-petition'' becomes more intense. So in today's Net economy, what does it take to succeed?

Ashok S. Kalelkar, Ph.D., Managing Director and General Partner of I-Group HotBank NE, Boston's premier Internet incubator and a SOFTBANK Corporation affiliate, is an authority on entrepreneurship and can provide insights and commentary on just what it takes to be a successful entrepreneur in the Net economy. With extensive experience mentoring entrepreneurs across the industry, Kalelkar is available to discuss such issues as:

The ``Top Ten'' secrets to starting a successful business in the
Net economy.

Funding your start-up: How much equity is too much to give away?
Not all VCs are created equal.
Business plans: Creating the best plan--and knowing how and when
to adapt it.

Internet Incubators: When to embrace (or avoid) incubation.
Risk and reward of advisory boards.
In a virtual marketplace, how much does location matter?
For more information or an interview with Ashok Kalelkar please contact Mike Schultz at (781) 684-0770.

In addition to his role as Managing Director, Kalelkar is an active angel investor and mentor to the Indian and entrepreneurial communities. With over 30 years of management experience in the technology industry, he is a leader in the Internet community. Kalelkar serves on the board of five high-tech start-up companies and was a founding member of TiE-Atlantic, the not-for-profit organization charged with fostering and supporting entrepreneurship by utilizing a strong network of individuals of Indus origin.

Acknowledged as a top incubator by venture capitalist and industry analysts, I-Group HotBank offers services that give young start-ups a six month head start in the important first-to-market race. I-Group HotBank is redefining incubators with its unique ``mentor capital'' services, which include management, partnership, investor and recruitment mentoring; access to SOFTBANK Corporation's powerful network of hundreds of companies and a sustained evergreen venture capital fund. I-Group HotBank's Ames Mansion is a 25,000 square foot brownstone mansion with original woodwork and designs, equipped with the latest technology, support and amenities. I-Group HotBank is located on the World Wide Web at i-group.com.

--------------------------------------------------------------------------------
Contact:

Schwartz Communications, Inc.
Mike Schultz/Michael DiLorenzo
781-684-0770
i-group@schwartz-pr.com


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To: Edwin S. Fujinaka who wrote (101)6/28/2000 9:00:00 AM
From: Glenn Petersen
   of 246
 
DVIN delayed again:

chicagotribune.com

Possible delay in IPO date
for Divine
Analyst questions offering's strength

By Bruce Japsen
Tribune Staff Writer
June 28, 2000

Andrew "Flip" Filipowski's Divine Interventures Inc.
may delay its initial public offering yet again.

The offering of the Lisle-based Internet holding
company, which had been expected to price Thursday
and begin trading Friday, has already been altered a
number of times.

So even if the delay is only until early July, as is now
expected, analysts say it's yet another setback in a string
of troubles in Divine's effort to become publicly traded.

A Divine spokeswoman wouldn't comment, citing a
Securities and Exchange Commission-mandated quiet
period in preparation for the IPO. She didn't, however,
deny reports that Divine planned to push back the IPO
until sometime next month.

Only three weeks ago, Divine restructured its initial
public offering by changing terms of the deal and
switching underwriters.

"They have made a lot of different amendments," said
Michael Falbo, analyst with IpoPros.com, a Boulder,
Colo., firm that tracks initial offerings. "We don't believe
that this deal is in very good shape at all."

But a potential investor who had attended the company's
recent road show told Dow Jones News Service that
the delay most likely wasn't caused by a lack of investor
demand.

Divine will need such investor confidence, given that as
part of the June 5 restructuring it raised the price of the
shares to be offered to between $13 and $15 a share
from the earlier price of $6 to $8 a share. The number of
shares offered in the IPO was slashed to just under 14.3
million from 20 million. The restructured IPO is
expected to raise roughly $200 million, up from $140
million in its previous incarnation.

Founded last year by Filipowski, who is arguably
Chicago's best-known computer personality, Divine
quickly became the most high-profile Internet firm in the
area. The company pulled together $400 million in
funding from a range of Chicago business leaders,
Microsoft Corp. and Dell Computer Corp. and
attracted media attention from around the country.

Filipowski led the charge to promote the new firm,
delivering speeches around Chicago about how
old-economy stalwarts must quickly join the Internet
frenzy or face extinction.

Divine, he said, planned to invigorate the local dot-com
scene by investing in a range of young Internet and
high-tech firms. The company quickly founded or
invested in 52 firms and brought in more than 750
employees, including the people at the companies in
which it made investments.

But Divine's rapid growth slowed earlier this year after
the technology-laden Nasdaq stock market plunged,
temporarily sapping investor interest in speculative
technology ventures. Divine laid off 29 employees in
May as it slowed the pace of its new investments and
delayed construction of its new $62.9 million
headquarters campus on Goose Island, which originally
had a move-in date of this fall.

The City of Chicago contributed $14 million in tax
increment financing for the Goose Island project.

Divine's IPO, if it does indeed go forward, should
provide the company with the money it needs to
continue construction at Goose Island as well as expand
and open new offices in Austin, Texas, Seattle and
abroad.

In addition to the cash infusion from the public offering,
Divine expects to receive $233 million from nine
companies in private placements to take place
concurrently with the IPO. The companies involved in
the private offering include Level 3 Communications,
Compaq Computer Corp. and 360 Networks Inc.

Most technology companies that were preparing public
offerings for this spring and summer have backed off,
either pulling their planned IPOs or going into a holding
pattern to see if the market improves for such ventures.

Divine bucked that trend. In May, the company dumped
its lead investment banker, Credit Suisse First Boston,
which wanted Divine to postpone its public offering. The
firm installed San Francisco-based Robertson Stephens
as its lead investment banker and announced plans to go
ahead with the IPO.

Pitched as a new-economy conglomerate, Divine invests
in Internet firms that do business with each other and
outside clients and rely on the parent company to
provide a range of resources and services. Divine
created numerous service companies to perform specific
functions, including those for public relations (Buzz
Divine), strategic consulting (Experience Divine) and real
estate (DotSpot Divine).

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To: Glenn Petersen who wrote (102)7/6/2000 9:23:10 AM
From: Glenn Petersen
   of 246
 
From this morning's Chicago Tribune:

chicagotribune.com

Market not looking divine
for tech IPO

By Jon Van
Tribune Staff Writer
July 5, 2000

An initial public offering set for Thursday by Divine
Interventures Inc. looks anything but heavenly to
analysts, and some question whether the IPO will
happen this week as planned.

Tech stocks took a hammering Wednesday as two
software companies warned that their quarterly earnings
will fall short of expectations.

The general jitteriness among investors with tech issues
could be especially bad for Chicago-based Divine
because of an indirect connection to Divine's founder,
Andrew "Flip" Filipowski.

Last year Filipowski sold his previous company,
Platinum Technology International Inc., for $3.5 billion
to Computer Associates International Inc., and
Computer Associates was one of the firms Wednesday
to say its earnings for the quarter will disappoint
analysts.

Computer Associates' stock dropped $21.75, or more
than 42 percent, on the news. Joining Computer
Associates in taking a beating on Wednesday was the
stock of BMC Software Inc., which also issued an
earnings warning and declined $14.19, or nearly 40
percent. And a ripple effect of wider worries about
mainframe computers saw IBM Corp. shares drop as
well, down $4.81, or more than 4 percent.

Divine is an incubator firm that helps accelerate the
growth of young Internet companies, taking an equity
stake in them. Incubators were hot on Wall Street last
year, but they've cooled in the past quarter, and Divine's
plans to go public in the spring foundered when its lead
investment banker Credit Suisse First Boston advised
against an IPO.

In May Filipowski dumped Credit Suisse and hired San
Francisco-based Robertson Stephens to push ahead. A
late June IPO target was missed, and chances it will
proceed this week appear to be fading.

"I've heard nothing concrete, but the IPO market is
relatively soft now," said Charles Rustein, an analyst with
Rorrester Research in Cambridge, Mass. "It's difficult to
see them getting out in this climate."

Filipowski, who has applied his charisma to give Divine's
IPO a high profile, faces a difficult timing problem, said
Rustein.

"If the market sees him try and try to go public but not
make it, then the likelihood of ultimate failure rises," he
said.

Citing the firm's "quiet period" imposed by the Securities
and Exchange Commission, a Divine spokeswoman
wouldn't comment on the IPO.

Even though Divine has attracted investment from big
name tech companies like Microsoft Corp. and Dell
Computer Corp., it needs the IPO to raise money to
fulfill its business plan. After the public offering was
delayed in the spring, Divine laid off 29 employes and
pushed back plans to construct a new campus
headquarters at Goose Island in Chicago.

"They have a good story," said Ullas Naik, senior
vice-president for research at First Albany Corp. in
Boston. "But the market for incubators isn't sturdy just
now."

Two companies similar to Divine—CMGI Inc. and
Internet Capital Group—did go public last year when
investor enthusiasm for the Internet was high. Since
reaching high points late last year, both firms have seen
their share value diminish by more than 75 percent. That
in itself could spook potential investors in Divine.

"They're in trouble either way they go," said Jeff
Hirschkorn, senior marketing analyst with New York
based IPO.com. "It's a good concept and six months
ago, it would have done well in the market.

"But right now the market is terrible. Still, the longer they
wait, the more that hurts them."

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To: Glenn Petersen who wrote (103)7/6/2000 2:34:14 PM
From: Mr. Park
   of 246
 
Not bad assessment of DVIN

streetsideinvestor.com

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To: Mr. Park who wrote (104)7/6/2000 5:31:44 PM
From: gladman
   of 246
 
No IPO for DVIN, just saw a news flash... they don't have SEC clearance.

This is becoming a comedy of errors with DVIN as the keystone cops.

How hard ARE they trying to screw this up?

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To: gladman who wrote (105)7/7/2000 5:35:42 PM
From: Glenn Petersen
   of 246
 
DVIN cuts range:

biz.yahoo.com

Friday July 7, 3:26 pm Eastern Time

Divine Interventures to cut IPO range - underwriter

NEW YORK, July 7 (Reuters) - Divine Interventures Inc., which invests in Internet-related companies, is cutting the price range of
its highly anticipated initial public offering to $9 to $10 per share, lead underwriter Robertson Stephens said on Friday.

The lowered price range will be filed with the Securities and Exchange Commission on July 10, Robertson Stephens said. The
underwriter declined to give further details.

When Divine last filed with the SEC on June 29, it said it planned to offer 14.285 million shares in an expected pricing range of $13 to
$15.

When the Lisle, Ill.-based company initially filed its IPO plans with the SEC in February, it planned to sell 50 million total shares in a range of $6 to $8 per share. In early April, the company added 15.9 million shares to the offering based on demand. On June 5, the company said it planned to sell about 36 million shares, with 14.28 million being sold to the public at $13 to $15 per share. Credit Suisse First Boston had been lead underwriter until Robertson Stephens took over.

The company plans to sell its shares on the Nasdaq under the symbol ``DVIN'' (NasdaqNM:DVIN - news).

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To: Glenn Petersen who wrote (106)7/7/2000 9:29:52 PM
From: The Other Analyst
   of 246
 
Looks to me like this is an issuer who is very particular about the IPO terms and wants to squeeze every bit he can out. He didn't like CSFB telling him he should wait, so he went to Robbie Stephens when they said they could get a higher price. Turns out they couldn't. This guy is not out to make money for the shareholders. I would avoid it.

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