Recent Trends in the Mergers & Acquisitions and Private Equity Markets

Transcription

1 Recent Trends in the Mergers & Acquisitions and Private Equity Markets Charles Uhrig Managing Director Raymond James August 31, 2007

2 Section 1 Recent Trends in the Mergers & Acquisitions Market

3 Recent Trends in the Mergers & Acquisitions Market Mergers & Acquisitions Overview Thru 6/30/07, domestic M&A activity was occurring at a record pace / annualized at ~$1.8 trillion for 2007 Over $400 billion in bank debt / high-yield backlog is currently causing digestion problems Driven by increased levels of both strategic and financial buyer interest Key drivers include: Availability of higher levels of debt Availability of lower cost debt Healthy corporate balance sheets Activist investor focus on increased profitability and growth Dramatic growth in number and size of private equity firms Increase in acquisitions in U.S. by non U.S. companies 3

4 Recent Trends in the Mergers & Acquisitions Market M&A Deal Volume and Number of Transactions (Figures in $ Billions) Domestic M&A activity has rebounded strongly over the period. Value ($B) 1,600 1,400 1,200 Transactions 14,000 12,000 10,000 1,000 8, ,000 4, , YTD 0 Value of Transactions Number of Transactions *Source: Securities Data Corporation YTD is as of 6/30/07. 4

5 Recent Trends in the Mergers & Acquisitions Market M&A Deal Volume and Number of Transactions (Figures in $ Billions) Quarterly domestic M&A activity has increased consistently since Value ($B) Transactions 3,000 2,750 2,500 2, , ,750 1, , /02 6/02 9/02 12/02 3/03 6/03 9/03 12/03 3/04 6/04 9/04 12/04 3/05 6/05 9/05 12/05 3/06 6/06 9/06 12/06 3/07 6/07 1,000 Value of Transactions Number of Transactions *Source: Securities Data Corporation. 5

6 Recent Trends in the Mergers & Acquisitions Market Common Reasons Given for M&A Activity Gain economies of scale Cross selling opportunities Increased market share / Pricing power Cost rationalization opportunities / Synergies Geographic expansion Vertical integration / Control of supply chain Diversification 6

7 Recent Trends in the Mergers & Acquisitions Market Trends in Purchase Price to EBITDA Multiples 13.0x The following graphic compares the median historical acquisition purchase price to EBITDA multiples paid by financial and strategic buyers. 12.0x 11.0x 10.0x 9.0x 8.0x 7.0x 6.0x 5.0x YTD Financial Buyers Strategic Buyers *Source: Securities Data Corporation YTD is as of 6/30/07. 7

8 Recent Trends in the Mergers & Acquisitions Market Average Debt Multiples 8.0x Average Debt Multiples of Highly Leveraged Loans 7.0x 1.5x 6.0x Debt Multiple 5.0x 4.0x 3.0x 2.4x 2.5x 2.5x 1.9x 2.3x 2.1x 2.0x 1.5x 1.2x 1.2x 1.6x 1.7x 1.9x 1.8x 1.7x 1.8x 5.9x 2.0x 1.0x 2.6x 2.7x 2.8x 3.3x 3.6x 3.6x 3.1x 3.2x 3.1x 2.5x 2.5x 2.7x 3.0x 3.6x 4.0x 4.1x 0.0x Q1 07 Q2 07 Bank Debt / EBITDA Non-Bank Debt / EBITDA Average debt multiples have increased consistently since *Source: Standard & Poors LCD. 8

9 Recent Trends in the Mergers & Acquisitions Market Florida M&A Deal Volume and Number of Transactions (Figures in $ Billions) Value ($B) 12 Transactions 200 Middle market ($10-$250 million) M&A transactions in Florida have increased since 2001, but not as dramatically as the overall M&A market YTD Value of Transactions Number of Transactions *Source: SDC 9

10 Recent Trends in the Mergers & Acquisitions Market Venture Capital: IPO Market in the U.S. 13 Venture Capital-backed IPOs in 1Q 07 Same as the year-ago quarter 56 Venture Capital-backed IPOS over the trailing twelve months 47 IPOs in previous 12 months Venture-backed M&A was $9.4 BB in 1Q 07 Compared to $8.4 BB in 1Q 06 Venture-backed M&A was $32.6 BB over ther trailing twelve months Compared to $31.2 BB in previous 12 months 10

11 Recent Trends in the Mergers & Acquisitions Market U.S. Venture Backed Liquidity Events 100% Percentage Breakdown of Venture Backed Liquidity Events 80% 60% 40% 20% 0% H07 IPOs M&A 11

12 Recent Trends in the Mergers & Acquisitions Market Key Drivers of U.S. M&A Activity: Shareholders and Directors Institutional Investors More vocal about their strategies to maximize shareholder value, including potential restructurings or divestitures Proposing that directors be more closely aligned with shareholders and more responsive to their views More willing to vote down management proposals Board of Directors Boards realize that for the courts to grant deference to their decisions, they must act with independence and integrity Directors are more active in the overall business review process Directors are more involved in demanding value-enhancing activity and review M&A proposals more closely 12

13 Recent Trends in the Mergers & Acquisitions Market Practical Considerations for Acquirers Institutional shareholders are growth-driven and will reward strategic decisions that are valueaccretive, without significantly decreasing Free Cash Flow per Share. M&A should be a critical component of most companies business strategy and an important contributor to growth targets. Seek growth areas that align with strategic focus and competencies Divest where necessary to increase focus on core business Companies should promote internal processes that facilitate capitalism on M&A opportunities. 13

14 Recent Trends in the Mergers & Acquisitions Market Practical Considerations for Sellers Focus first on creating value as a stand-alone business Do not assume sale is the optimal or only path to liquidity Robust businesses garner greater value as acquirers value complete teams and the availability of an IPO alternative creates a valuation benchmark Patience is often the key Key to extracting a premium valuation in a sale of the business is to create competition must bring multiple parties to the table. Remember that nobody gets married on the first date Alternative transactions can be just as effective in creating pressure Always have sufficient capital and an escape plan if a transaction is not successful Understate and over-deliver on promises Credibility lost cannot be regained Clean the cupboards; disclose issues and mitigate them People are important; establish relationships of trust 14

15 Recent Trends in the Mergers & Acquisitions Market Major Causes of Failed Deals Poor assessment of strategic fit Lack of ability to manage acquired operations Distract from core business Insufficient due diligence Undiscovered financial problems Customer/technology issues Loss of key personnel Poor analysis of financial consequences of a transaction Poor cultural fit 15

16 Recent Trends in the Mergers & Acquisitions Market Where is the M&A Market Headed from Here? The next six to twelve months should see moderation in M&A activity from recent levels. Strategic buyers will still be active for the following reasons: Companies are realizing that they need to scale to ensure business model viability Companies are moving away from an internal/restructuring focus to an external/growth/consolidation strategy Corporate clarity still a strong theme Most industries are only partially through the consolidation process Macroeconomic conditions continue to offer a favorable backdrop to M&A activity Relatively strong corporate balance sheets Private Equity buyers are likely to reduce their levels of activity due to: Increased cost of debt Reduced availability of debt Need to close current backlogs Potential tax law changes could increase Private Equity hurdle rates 16

17 Section 2 Recent Trends in the Private Equity Market

18 Private Equity Environment 2006 Review Globally, 612 new funds held a final close during 2006 Raised a record $401 billion in aggregate of new commitments far surpassing the previous record total of $311 billion set in new U.S. funds comprised 63% of the total commitments ($252 billion) Europe comprised 27% of all capital raised through 168 funds ($108 billion) 133 funds in the rest of the world raised $41 billion in private equity capital The ever increasing amount of committed capital has turned the focus of private equity firms to large scale deals and has set the stage for the largest deal volume in the history of the industry. 18

19 Private Equity Environment Fundraising U.S. private equity firms have raised $137 billion in 199 funds through the first half of 2007, a 42% increase over the first half of 2006, and on pace to surpass the record total $252 billion raised in U.S. Private Equity Annual Committed Capital $300 $250 $252.0 $200 $173.5 ($ in billions) $150 $100 $50 $0 $52.4 $32.8 $37.2 $0.6 $1.5 $3.5 $3.0 $5.2 $16.1 $12.8$11.9 $9.5 $7.5 $12.6$17.8$24.6 $79.4 $73.0 $89.6 $65.0 $45.7 $38.8 $55.0 $ H Buyout firms > $1 Billion Buyout firms with > $1 Billion Source: Venture Economics, The Private Equity Analyst, Buyouts, Private Equity Online and Dow Jones 19

20 Private Equity Overview Equity securities of companies that are not publicly traded An umbrella term whose major categories include: Venture capital Mezzanine Buyouts Strategies include: Geography (e.g. China) Industry (e.g. Telecom) Structure (e.g. Mezzanine) Situation (e.g. Distressed securities) Investors include: Qualified individuals Pension funds Investment funds Corporations 20

21 Private Equity Overview Benefits Historically attractive returns Risks Illiquid Private not subject to market gyrations or distractions High fees (2% annual fee and 20-25% of profits plus transaction fees typical) Management / Board of Director / Owner alignment Difficult to mark to market Rely on leverage to enhance returns 21

22 Private Equity Environment Historical Returns U.S. Private Equity Performance Index Fund Type 1 Year 3 Year 5 Year 10 Year 20 Year Venture 16.4% 9.1% 1.0% 20.3% 16.6% Mezzanine Buyout All Private Equity Nasdaq S&P Source: Thomson Financial / National Venture Capital Association 22

23 Private Equity Environment Historical Returns The private equity market has consistently outperformed the S&P 500 over the last 10 years However, private equity returns tend to trend with the overall market environment LBO Top Quartile Returns Versus S&P Returns 35.0% 30.0% 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% % -10.0% -15.0% Top Quartile Returns S&P Weighted Returns Source: Thomson Financial Note: Returns calculated based on cumulative return over five years. 23

24 Private Equity Environment 2006 Review Large scale buyouts and an unprecedented volume of private equity transactions defined 2006, surpassing, in transaction value, all U.S. deals announced in 2003, 2004, 2005 in aggregate. According to Dealogic, during 2006, private equity firms announced acquisitions of U.S. companies for a total value of approximately $563 billion. The private equity market continues to target large scale transactions in the United States and abroad, in order to invest ever increasing amounts of capital at an increasingly rapid pace Large Scale Private Equity Transactions Announced or Closed Target Name Equity Office Properties Trust HCA Inc Clear Channel Communications Inc Harrah s Entertainment Inc Kinder Morgan Inc Albertsons Inc Freescale Semiconductor Inc Univision Communications Inc VNU NV Philips Semiconductors Biomet Realogy Qantas Airline ARAMARK Corp Michaels Stores Inc Advanced Semiconductor Kion Group Sponsors Involved Blackstone Bain, KKR, ML PE Bain, TH Lee Apollo, TPG GSCP, Carlyle, Riverstone, Management SuperValu, CVS, Ceberus Blackstone, Carlyle, Permira, TPG MDP, Providence, TPG, TH Lee Blackstone, Carlyle, KKR, TH Lee, H&F, Alpinvest KKR, Silver Lake, Alpinvest, Bain, Apax Blackstone, GS, KKR, TPG Apollo Allco, Macquarie, Onex, TPG GSPC, TH Lee, JPMorgan Partners, Warburg, Management Bain, Blackstone Carlyle KKR, GSCP Transaction Value ($bn) $

25 Private Equity Environment 2007 Update The private equity market in 2007 continues to deploy capital at unprecedented levels Transaction sizes have continued to increase, fueled by aggressive leverage packages that have been maintained through the first half of 2007 Many of these transactions have covenant-lite structures with creative debt features such as the toggle note The third quarter of 2007 will be a deafening moment for private equity as debt buyers will be inundated with paper from these large scale transactions Target Name Sponsors Involved Transaction Value ($bn) Hilton Hotels Manor Care BCE Allison transmission Intelesat Home Depot Supply Nuween Investments Penn National Gaming Avaya CDW Alltel Alliance Data Systems The Chrysler Group Thomson Learning U.S. Foodservice Herman International Industries SLM First Data Affiliated Computer Services ServieMaster Dollar General Corp TXU Mills Corp. Blackstone Carlyle Madison Dearborn, Providence Onex, Carlyle BC Partners Bain Capital, CD&R, Carlyle Madison Dearborn Partners Fortress, Centerbridge Silver Lake, TPG Madison Dearborn Partners GS, TPG Blackstone Cerberus Apax, OMERS Capital Partners Clayton Dubilier & Rice, KKR GS, KKR BoA Equity Partners, FFL, JC Flowers KKR Cerberus Clayton Dubilier & Rice KKR Citigroup, GSPC, KKR, LEH PE, MS PE, TPG Farallon Capital, Simon Property Group $

26 Historical Buyout Dollar Volume Value of Completed U.S. Transactions $450.0 $400.0 $393.5 $350.0 $300.0 ($ in billions) $250.0 $200.0 $233.0 $248.3 $150.0 $130.3 $100.0 $93.9 $50.0 $28.9 $33.0 $56.7 $52.5 $40.5 $19.5 $21.9 $47.0 $ H07 LTM Source: Standard & Poor s 26

27 Buyout Volume Share of M&A Activity Est. Global Private Equity M&A Deal Volume ($bn) $1,200 $1,096.0 $1,000 $985.0 $800 $600 $616.0 $400 $315.0 $200 $170.0 $197.0 $120.0 $158.0 $203.0 $ Annualized Private Equity as a % of Total Global M&A Deal Volume 30% 25% 24% 24% 20% 20% 15% 12% 13% 14% 10% 5% 4% 5% 6% 0% YTD Source: Thomson Financial 27

28 Private Equity Environment Average Transaction Size The size of transactions has increased significantly since 2001, as private equity funds seek to deploy large sums of capital in larger scale opportunities $3,000.0 Average U.S. LBO Size by Total Sources $2,500.0 $2,407.8 ($ in millions) $2,000.0 $1,500.0 $1,309.0 $1,000.0 $972.0 $716.0 $706.0 $500.0 $516.0 $361.0 $403.0 $367.0 $351.0 $389.0 $540.0 $ H07 Source: S&P 28

29 Private Equity Environment Public to Private Transactions As the private equity industry has evolved to encompass a larger portion of the total M&A market, and private equity professionals have raised more capital, the access to public targets has increased. Furthermore, activist hedge funds and stringent corporate governance issues have contributed to take-private activity. $80 Public to Private Activity $70 $60 ($ in billions) $50 $40 $30 $20 $10 $0 1Q98 2Q98 3Q98 4Q98 1Q99 2Q99 3Q99 4Q99 1Q00 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 3Q04 4Q04 1Q05 2Q05 3Q05 4Q05 1Q06 2Q06 3Q06 4Q06 1Q07 2Q07 Source: S&P 29

30 Public Valuation Multiples Have Moderated Over Time 35.0x Average S&P 500 P/E and EV/LTM EBITDA Multiples 30.0x 29.9x 28.1x 25.0x 24.0x 24.5x 21.1x 20.0x 18.5x 16.1x 15.9x 15.0x 10.0x 12.9x 11.0x 11.5x 11.2x 11.2x 10.3x 9.7x 10.0x 5.0x 0.0x H07 S&P 500 P/E 1 2 S&P 500 EV/LTM EBITDA Source: Portfolio Management Data, Morgan Markets, FactSet Note: (1) Average S&P 500 forward PE throughout the year (2) Average S&P 500 EV/LTM EBITDA throughout the year 30

31 But Private Purchase Multiples Have Expanded Average Acquisiton Multiple (Purchase Price/EBITDA) for U.S. Transactions 12.0x 10.0x 10.0x 8.0x 6.0x 6.7x 7.5x 7.9x 6.8x 6.4x 6.1x 6.5x 6.7x 7.1x 8.1x 8.6x 4.0x 2.0x 0.0x Source: Standard & Poor s Note: Multiples exclude fees H07 31

32 Leverage Multiples Increasing Average Total Debt/EBITDA for U.S. Transactions (1) 7.0x 6.2x 6.0x 5.0x 4.0x 5.0x 4.9x 4.3x 4.1x 3.5x 3.9x 4.1x 4.6x 5.0x 5.1x 3.0x 2.0x 1.0x 0.0x H07 Source: Standard & Poor s Note: (1) Excludes Media and Telecom loans 32

33 Equity Contribution Percentages Consistent with the receptivity of higher leverage levels by the financing markets, private equity firms have been decreasing the amount of equity contribution, further enhancing returns. Equity/Total Enterprise Value for U.S Transactions 45.0% 40.0% 35.0% 30.0% 30.0% 31.7% 35.7% 37.8% 40.6% 40.0% 39.5% 35.1% 32.1% 31.1% 30.3% 25.0% 22.9% 20.0% 15.0% 10.0% 5.0% 0.0% Q207 Source: Standard & Poor s 33

34 Credit Quality of LBOs Attractive capital markets have supported lower-rated and more highly leveraged buyouts The strength of the high yield market allowed sponsors to push the envelope on leverage ratios A significant portion of LBOs have slipped into the CCC rating category Average Leverage of High Yield LBOs (1) (2) Percent of High Yield LBOs Rated CCC (2) 8.0x 90.0% 84.8% 7.0x 6.7x 80.0% 6.0x 5.0x 4.7x 4.8x 4.7x 4.6x 5.3x 5.5x 6.1x 70.0% 60.0% 4.0x 3.0x 2.0x 1.0x 0.0x YTD % 40.0% 30.0% 20.0% 10.0% Source: Lehman Brothers High Yield Capital Markets (1) Includes Media and Telecom loans. Excludes LBOs that did not issue high yield. (2) YTD 2007 as of May 21, % 0.0% 0.0% 0.0% 9.6% 24.1% 41.3% 46.1% YTD

35 Credit Quality of High Yield New Issues CCC or Lower New Issues Volume ($ in millions) CCC or Lower New Issues Volume as a % of Total $40,000 35% 33% $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $12,962.0 $30,928.0 $23,368.0 $32,597.0 $33, % 25% 20% 15% 10% 9% 20% 21% 24% $5,000 $2, % 3% $0 0% YTD YTD 2007 New Issuer Ratings Breakdown (1) BB 21% CCC 9% NR 2% B 68% BB 20% CCC 20% NR 2% B 58% BB 19% CCC 21% NR 2% YTD B 58% CCC 24% BB 24% NR 3% B 49% CCC 31% BB 23% NR 3% B 43% Source: Lehman Brothers High Yield Capital Markets (1) YTD 2007 as of May 21,

36 High Yield Spreads Cheap Money Spread between lower credit bonds and U.S Treasuries, , in basis points Long-term average (1987-YTD 07) = 541bp 36

37 Historical High Yield Outstanding vs. Default Rate Total Value of All High Yield Outstanding vs. Default Rate $1,000.0 $900.0 $800.0 $762.6 $881.6 $918.1 $913.2 $950.8 $947.1 $ % 10.0% ($ in billions) $700.0 $600.0 $500.0 $452.1 $571.5 $629.4 $ % 7.3% 8.0% 6.0% $400.0 $300.0 $ % 4.7% 4.0% $200.0 $ % 1.4% 1.7% 3.0% 1.0% 2.6% 1.8% 1.6% 2.0% $ Q % Source: JPMorgan High Yield Capital Markets Note: JPMorgan Domestic High Yield Default Rate 37

38 Acquisition & Leverage Multiples vs. Default Rate Average Purchase Price/EBITDA and Total Debt/EBITDA for U.S. Transactions vs. Default Rate 12.0x 9.0% 10.0x 8.0x 6.0x 4.0x 2.0x 0.0x 8.3% 10.0x 7.3% 8.6x 8.1x 7.9x 7.5x 7.1x 6.8x 6.4x 6.5x 6.7x 6.1x 4.7% 6.2x 4.0% 5.0x 4.9x 5.0x 5.1x 4.6x 4.3x 3.0% 4.1x 3.9x 4.1x 3.5x 2.6% 1.7% 1.8% 1.4% 1.6% 1.0% Q207 Purchase Price/EBITDA DEBT/EBITDA Default Rate 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% Source: Standard & Poor s Note: JPMorgan Domestic High Yield Default Rate. Acquisition and Leverage Multiples are Q and Default Rate is LTM 9/3/06. (1) Excludes Media and Telecom loans 38

39 The Beginning of the End of a Cycle Banks providing equity bridges Loans with no amortization Interest rate toggle Covenant-lite loans 39

40 Covenant-lite transactions and toggle notes may now be a thing of the past Covenant-Lite Transaction Volume $100.0 $ % $90.0 $ % Volume (in $billions) $70.0 $60.0 $50.0 $40.0 $30.0 $ % 20% 15% 10% % of Institutional Volume $20.0 $10.0 $- $1.8 $3.1 $0.3 $0.3 $- $- $0.5 $0.1 $ YTD 5% 0% Covenant Lite Volume % of Institutional Volume Source: Standard & Poor s 40

41 Backlash against Private Equity Surge Press Shareholders Sellers Regulators Unions Congress Boards of Directors 41

42 Private Equity Environment Purchase Premiums Private equity transactions have come under increasing scrutiny as investors claim that premiums are well below expectations. Private equity firms are being forced to defend themselves against charges that their transactions rob public shareholders of the potential for higher value. 30% Purchase Price Premium to Market 25% 20% 25% 25% 22% 21% 21% 20% (% Premium) 15% 10% 7% 16% 10% 8% 5% 0% 0% $0.25bn-$0.5bn $0.5bn-$1bn $1bn-$5bn Over $5bn 0% 1 Day Before Announcment 30 Day Average Before Announcement 52-Week high Source: Weil, Gotshal & Manges 42

43 Public Buyout Board Climate Pre 2006 Today Exclusive negotiations with management and special committee of the target board of directors No announcement until executed definitive merger agreement Merger agreement includes: No shop provision / fiduciary out Breakup fee 2 to 3% of transaction value Financing condition True material adverse change out Right to match competing offer Independent directors take control of process Management increasingly perceived as having conflict of interest Management excluded from negotiations with P.E. firm Merger agreements include Go shop provision and fiduciary out No right to match Breakup fee and corresponding reverse breakup fee No financing condition Limited or no material adverse change out 43

44 Outlook The cost of buyout financing is increasing as spreads widen and the buyer pool is reduced The terms of financing will become more restrictive but are really just returning to historical levels The increased costs of financing mean Private Equity firms can t hit targeted returns unless they pay lower prices Sellers / investors will resist the lower purchase prices given the relatively recent higher comparables Private equity buyout volume will likely decrease in the short term Strategic acquirer share already at 75% - will likely increase due to healthy balance sheets, still attractive financing terms and availability of cost and revenue synergies. 44

45 Possible Growth Outlets for Buyout Funds Distressed debt International buyouts Significant minority investments Add on private company acquisitions for existing portfolio companies 45

46 Section 3 Overview of Raymond James

47 Overview of Raymond James Overview of Raymond James Full-service securities firm founded in 1962 and public since 1983 ( RJF on NYSE) Fiscal 2006 revenue in excess of $2.6 billion; net income over $200 million Equity market cap in excess of $3.8 billion Major presence in North America and Europe Over 5,200 financial advisors, with offices in all 50 states; 1.5 million accounts* Member of the Fortune 500. Ranked 11 th among securities firms. (2007) 27 domestic and international investment banking and institutional sales offices* European operations in London, Paris, Geneva, Brussels, and Düsseldorf* Client Assets of over $200 Billion Managed Assets of over $36 Billion Operates a Commercial Bank with Assets in excess of $3.5 Billion *RJF data as of June 30,

48 Overview of Raymond James Raymond James North American Locations Retail Branch, Institutional Sales and Investment Banking Locations Raymond James has nearly 2,300 offices covering all 50 states and Canada. Raymond James Retail Location Raymond James Institutional Location Raymond James U.S. Investment Banking St. Petersburg, FL Atlanta, GA Chicago, IL Dallas, TX Houston, TX Nashville, TN New York, NY Palo Alto, CA 48

49 Overview of Raymond James Opportunities with Raymond James Over 200 University of Florida graduates work at Raymond James Headquartered in St. Petersburg but numerous locations throughout the United States. Selective areas of interest to business students include: Corporate Finance / Investment Banking Research Sales & Trading Asset Management Retail Brokerage Real Estate Commercial Banking 49

50 Overview of Raymond James Raymond James Financial Stock Price Performance 3,100 Indexed Price to 100 as of 24 Aug 87 8/24/1987-8/24/2007 Raymond James Financial Inc. S&P 500 Index NASDAQ Composite Index 2,600 RJF +2944% 2,100 1,600 1, NASDAQ +470% 100 '88 '89 '90 '91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02 '03 '04 '05 '06 '07 S&P +343% 50