CWNO Historical Archive: Feb. 14, 2005

ZeusX Sets Record for Largest IPO in History

February 14, 2005- New York, NY- While the ZeusX app has been a remarkable success since its launch in March of 2000, the record-breaking performance of its IPO still managed to shock the world today. The offering shattered the expectations of analysts on its way to raising $43.8 billion, eclipsing the previous high of $39.6 billion raised by energy company Exodus OC in early 2004.

Traders prepare for the opening of the market and the highly-anticipated IPO of ZeusX.

The IPO comes on the heels of a year fraught with issues for ZeusX. Just eleven months ago, the company was embroiled in controversy, as co-founders Donald Hopkins and Arnold Cunningham filed a lawsuit against fellow co-founder Peter Arlington, alleging that Arllington had used illegal tactics to reduce the ownership stakes of Hopkins and Cunningham before taking actions to push them from the company.

The suit, of course, never made it to trial, as Donald Hopkins was found dead in his car in an apparent suicide just three months after the suit was filed. Within a week, Cunnigham dropped the suit, claiming that Hopkins had blackmailed him and forced him into participating in the action against Arlington. Since the time the suit was originally filed, Arlington has proclaimed his innocence, all while taking on a larger role as the company’s CEO and becoming one of the hottest names in business.

The tech sector soared as ZeusX shattered records today.

Arlington, Hopkins, and Cunningham started ZeusX in 1997, three college friends who “felt they brought complementary skill sets to the table”. Hopkins, who left college after just two years to pursue the idea, has received most of the credit for the ZeusX concept and for building the app. He served as both the company’s CEO and CTO until his death. Hopkins was “a unique being, blessed with both a natural aptitude for coding and a very outgoing and likable personality,” once wrote tech analyst Malcolm Reinkopf.

Hopkins and Cunningham claimed in the lawsuit that they did much of the early work needed to get the business going. Cunningham, a finance major who had one semester of college left when he began working with Hopkins, handled much of the company’s early administrative, financial, and legal work while he completed his studies. He has been described as a shy and somewhat awkward man with a deep love of learning.

Arlington, who had only recently graduated from college at the time the company was established, was recruited by Hopkins to join the team. At the time, Arlington was working for the acclaimed consulting firm MacAllan in the firm’s technology practice, and Hopkins saw an opportunity for him to build the strategy for the company. Arlington worked on the ZeusX venture for approximately a years and a half while at McAllan before leaving the firm to join ZeusX full time as the company’s COO. He focused much of his early efforts on establishing partnerships for ZeusX, an important part of the strategy he had built.

While Arlington undoubtedly deserves much of the success for ZeusZ’s success, there are many who do not hold him in high regard. One potential partner he approached about working with ZeusX early on was quoted as saying, “While we all took an immediate liking to Donald, when it came time to make a decision about working with ZeusX, every one of us pointed to Arlington as a non-starter. If he was at the company, we wouldn’t work with ZeusX.” Another colleague echoed this sentiment. “He’s a smart person, wicked smart at that, but you just know there’s a risk if you get into business with him. On one hand, you know he might take your company to the moon…but you’ll be looking over your shoulder, waiting for him to kick you out the side door, the whole way there.”

A trader pumps his fist in celebration as ZeusX’s IPO blows past expectations.

Despite the issues plaguing the founder team, ZeusX launched in March, 2000 in unmatched fashion, smashing download records and earning rave reviews from consumers. Within sixteen months, ZeusX had become the most downloaded app of all-time, and nothing seemed to be standing in the company’s ongoing success until the dissent between the three founders boiled over and Hopkins and Cunningham filed the lawsuit.

The lawsuit gave the public something it had never had before- an inside look at one of the world’s most successful private companies- and competitors sought to take advantage. Arlington, however, refused to let anyone take advantage of the situation. He took swift action to take the reins of the company and met with investors to ensure he had their confidence and support. Then, just as the discovery process was set to begin, news broke that Hopkins had been found dead in his car, the apparent victim of a self-inflicted gunshot.

While the media turned the discovery into front page fodder, investors remained unshaken, as Arlington had solidified the company’s management ranks by hiring world-class executives into the roles of CTO, COO, and CFO. When Cunningham withdrew the lawsuit just weeks later, he painted an ugly picture of Hopkins, and confidence in Arlington swelled to an all-time high.

Now, hardly a half year since the series of strange events at ZeusX, the company has seemingly built more momentum than ever before, and Arlington has become the latest darling of Wall Street.