By the Editors September 26, 2013
Khadeeja Safdar wrote her 10,000-word master’s thesis for the Columbia Journalism School’s M.A. program about Facebook’s troubled 2012 initial public offering, timing it for the IPO’s one-year anniversary. (Facebook shares lost a quarter of their value in their first month of trading, and a blizzard of lawsuits ensued). The Atlantic published “Facebook, One Year Later: What Really Happened in the Biggest IPO Flop Ever” — an edited version of the thesis – on May 20, 2012. The article related the experience of one unhappy investor, and revealed some of the shady practices that banks and hedge funds had engaged in during the deal. It was the “most read” business story on The Atlantic’s website that month, and was cited or recommended by many publications, websites and blogs, including The Wall Street Journal, The Globe and Mail, The Daily Beast, and Gawker.
After graduating in June, 2013, Khadeeja did a summer internship at The Wall Street Journal, and joined the staff in August. She spoke with adjunct professor Rob Norton in September about how she conceived, reported, and published her thesis.
Did you start out with the idea of doing your master’s thesis about Facebook?
No. My first idea was a really horrible one. It was about a bank that had collapsed as a result of a money laundering scandal in the 1990s. An acquaintance knew a lot about that story, and was connected to some of the players. I thought I would be able to get access to major people who’d been involved pretty easily, and that I could find out something new about it. Professor Stewart [James B. Stewart, the Bloomberg Professor of Business Journalism at the Columbia Journalism School and Khadeeja’s thesis adviser) told me it was a bad idea – that it happened a long time ago, that my thesis wouldn’t be timely, and that nobody would care – and he was right. I was thinking about what would be feasible rather than what would be interesting, and I realized that that’s a really bad way to approach a project like this, even though when you see “10,000 words,” that may be your first instinct.
So how did the idea to write about Facebook’s IPO develop?
Professor Stewart told me that if I really, really wanted to do the banking story, I could go ahead – because people have proven him wrong in the past – but I wasn’t that confident about it to begin with. He told me to write a list other topics, with questions about them that interested me. I actually came up with 10 or 12, and some of them were incredibly ambitious. One was about initial public offerings (IPOs) of Internet companies. There had been quite a few, and a lot of news about them, and a lot of discussion, ending with Facebook’s big disaster. First I thought I could look at a bunch of them, because I felt at that time that Facebook’s was over-covered, and it didn’t seem at first like there were any unanswered questions about it.
But the Facebook IPO – which had been one of the biggest ever – had generated so much interest that when I talked about it with Professor Stewart, he said that it would still engage readers if I could manage to find out anything new. So I decided that I was going to write my thesis about the Facebook IPO.
How did you go about reporting it and refining the idea?
The first thing I did was to read Professor Stewart’s book, Follow the Story: How To Write Successful Nonfiction, and that was really motivating, because it gave me a roadmap for what I should do and where I should begin. It’s very explicit and clear. I recommend it to anyone who is doing a thesis or a project like this. It was kind of calming, too, because it gave me direction.
The next thing I did was to familiarize myself extremely well with what had already been published. There was quite a bit. I went to all the major business news websites and created a massive multipage document – a timeline – and wrote down the lead and nut graph for every story going back to 2010, and in some cases even before that. I looked for anything related to the IPO or the events that led up to it. As I got closer to the date of the IPO the plot thickened; it was like stories were being published every day.
It was a lot of research, and it took me a good month, but at that point I knew exactly what everyone else knew, and it was easier to think about what questions remained. I knew that there were civil proceedings going on, so I got in touch with the public information officer at the U.S. district court where the big securities cases are litigated. She told me which documents would be in the public record, and how to secure them, so I started reading those and following those as well, in addition to all the news stories. At this point, I felt like many things that had happened in the IPO were wrong, and I had lots of lingering questions.
In mid-December, Morgan Stanley was fined for their participation in the Facebook IPO. A consent order was issued, and a couple of news organizations wrote about it. I read the consent order in the context of everything else that I had been reading, and it gave me a good idea about the way I could identify people who could be sources. I went through the back door, in a way. I started looking for former employees. Not the most obvious people that you would think. I didn’t go directly to Morgan Stanley or to the bankers involved in this story at that time. I didn’t go directly to Facebook.
I talked to people who had come into contact with Facebook during the IPO, and I started piecing things together. Sometimes a source would only tell me one little thing, and it ended up being enough to be able to contact someone else and get more information from them.
Could you give an example?
Some of my sources were not for attribution, so I want to be careful. For example, I found someone who had been a colleague of one of the story’s main characters in the past. This source was able to tell me a lot about the person, as well as background information. The source wasn’t able to tell me specifics about the Facebook IPO, but gave me the names of people that you would never see in a news story who had worked alongside this person. I was then able to go to them and ask for further information.
A lot of the material I got from sources like these ended up being cut, but it really enriched my understanding of what had happened, and colored the way story came out – the narrative. I was really confident about what I was writing when I got to that stage, because I had these personal accounts.
It’s easy to become obsessed with getting quotes, and I think I might have been guilty of that when I started. But what I found was that if you’re writing a narrative, quotes should be the least of your concerns. Instead, you should try to become the knower of the story, so that when you write it, you’ve heard it from five different points of view and you know what you’re writing about. You really don’t need a lot of quotes at that point. You can put in one or two sentences, or even a one-liner at the end of a narrative section, and it’s very effective.
What was the next step?
Up to that point, I had been working on the story of what the banks were doing with Facebook during the IPO, and that was all mostly behind the scenes. I could have just stuck with that. I had 6,000 words written. But I thought that it would be really cool if I could find someone who could make the story come to life from a completely different perspective.
There were a lot of stories about individuals who invested in the Facebook IPO and lost money, but they weren’t particularly compelling or interesting because they had been written about so much. But there were several news articles about a retired schoolteacher who had filed a claim against Facebook and the underwriters through the Financial Industry Regulatory Authority. It was an interesting story, and what struck me about it was that her voice was completely missing in all the stories. They recounted the complaint and summarized it, but there was nothing from her.
As I thought about, I wondered how she felt and what had actually happened, and why she wasn’t quoted in any of the articles. I became kind of obsessed with finding her, because I really wanted to know what she was thinking, whether she still had her money in the stock and what happened to her. I wanted her to have a voice.
I found her home phone number and I called her on a schedule; I would call her once a week and she would never pick up. I think I left two voicemails. I tried to search for her on Facebook and I tried to Google her, but I couldn’t find her there.
My break came when I found a news article about an unrelated subject – about another school teacher in her area who had been discriminated against unfairly – in which the schoolteacher I was looking for was quoted. So I looked for the woman who was the subject of the article, found her on Facebook, and found my schoolteacher among her Facebook friends. Then I Facebooked her and I told her the whole story about what I was doing and the project I was working on. I told her I had been trying to reach her for a long time.
How hard was it to convince her to talk with you?
I’m pretty sure, looking back, that she must have thought that I was kind of ridiculous. My first appeal to her was just me telling who I am and how I’m writing this thesis and how I read these news articles about her and I really want to know what actually happened and whether she got her money back, and I’m really interested. I could see that she had read the message, but she didn’t respond. I was worried that she wouldn’t talk to me.
Then I read in her “About Me” section on Facebook that she considers herself a writer and someone who really cares about the truth. So in my second appeal I mentioned that I had read her “About Me” section, and told her that I realized that other people might have contacted her in the past, but that I was genuinely interested in talking with her, and that I was sincere about it and just wanted to find the truth.
She wrote back a couple minutes later, saying she was sorry she didn’t respond the first time, that she was in India, and that she would talk to me when she came back.
I was cutting it close at this point, because I had to turn in the draft in two weeks. So when I hadn’t heard from her in a few days, I contacted her again and I asked if I could Skype with her if she was still in India. She said yes, and we spoke on Skype for an hour, and she basically told me her whole story.
Over the course of the next month, as I completed the thesis, I Skyped with her six or seven times. I wanted to double-check the events, double-check her account history and how much money she had invested, and I wanted to do due diligence and call the people that she had dealt with and those she had made claims about in the story. At this point I felt that I had gotten to know who she was, and I thought I could make her really come to life in the story.
Professor Stewart gave me a lot of guidance about how to frame the beginning of the story. We decided that the most suspenseful part of the narrative was the instant that she decided to invest in the Facebook IPO. I had ordered past video footage of CNBC’s television coverage of the IPO, since she has been watching it the morning she bought her shares. I was able to make the scene come to life by incorporating details. So I started the story with that – with her – and I ended it with her, as well. It wound up being really easy to incorporate the bank story into that framework.
Sounds like you made your deadline.
Yeah, I did make my deadline. At that point I felt I could have reported the bank part of the story forever, because there are always lingering questions and different angles and different things that you can talk about. But I decided that I had enough to write a coherent story that I could put together. I had found out new information. For example, I found out that a lot of hedge funds had shorted Facebook, and that a lot of them had known pieces of information that investors, such as the schoolteacher, didn’t know – and that they never could have found.
I’m not sure that any laws were broken, so it’s not as if I found any criminal activity or anything like that. But it was interesting. When I put everything together, it tells a story about the IPO system, and just raises questions about whether the way that things are conducted is fair or right. There are clearly some things wrong with it. It would be nice if lawmakers could revisit the way that they’ve set up the system.
How did you go about finding a news organization that would publish it? Was it difficult to get them interested?
It actually wasn’t that hard. I sent cold pitch to a few publications – The Atlantic and two others. I’d love to say that it worked because I wrote such a magnificent pitch, but it wasn’t that. They were interested because of the topic. The Facebook IPO was a major topic of interest, and the first anniversary of the IPO was coming up, which goes back to the reason the idea was a good one to begin with.
An editor at The Atlantic wrote back within a few hours after I sent my pitch and said he was interested in reading the thesis. When I sent it to him, he read it immediately. I had already trimmed it from the original 10,000 words to about 8,000, but I was still concerned that it was still a lot, and I’m sure he had other things to do. But he called me back right away to say they wanted to run it. That made it was very easy for me to decide what to do. I contacted the other two publications I had sent pitches to and told them I had placed the story. The Atlantic editors were terrific to work with. They helped me trim it further, to about 4,500 words, but the arc of the story was still there. And they published it on the anniversary of the IPO.
What was the editing and fact-checking process like?
It was great. We worked to make it an easier read. We took out a lot of the detail about the banks and Facebook’s finance team – I had gone through the IPO roadshow day by day in the thesis. But I think having seen all the detail and work that had gone into the original draft probably gave the editors some comfort about the validity of the story. The Atlantic also knew it might be controversial, so their lawyers went through it. It was really good to have the school and my advisor standing behind me, vouching for the reporting and due diligence I’d done. For example, Professor Stewart had advised me to contact all the people and organizations mentioned in the story after I completed the first draft, and offer them an opportunity to tell their side of the story, or to correct any facts they thought were inaccurate. I talked to people at Facebook and Morgan Stanley, for example. They did go over things with me, but said it was their policy not to comment. I called them right before it was being published, to tell them again: This is being published in The Atlantic. Are you sure you don’t want to comment? Their response was, thank you for calling us to let us know.
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