Anyone who was silly enough to follow [Jack] Grubman’s advice didn’t get to stay in never-never land for long. In early March outspoken short-seller Manuel Asensio released the first in a series of devastating reports saying that Winstar’s common stockholders had a “far greater probability of losing their entire investment than they realize.” …”Winstar is like a Broadway sketch,” says Asensio, who dismisses the analysts as “idiots.” …The response from the analyst camp? Buy! Salomon and CSFB, Winstar’s bankers on its high-yield deal, were the company’s most vociferous defenders. “There are not serious default concerns on [Winstar’s] bonds,” said Grubman on March 8. He characterized Asensio’s report as “incomplete, inaccurate, or inconsistent with our analysis.” …. [On April 18] Winstar announced that it was filing for bankruptcy.
Bethany McLean, Fortune