While covering the hot IPO of enterprise darling Arista Networks, Bloomberg made a startling disclosure on Friday: Arista had offered pre-IPO stock to a journalist who covers the company. That’s the second public disclosure of Arista’s unusual “friends and family” stock sharing plan.
“[CEO Jayshree] Ullal was criticised for offering pre-IPO ‘friends and family’ shares to several reporters, including a Bloomberg News reporter. The offer, which the Bloomberg News reporter declined, was rescinded after the company was criticised.”
Business Insider has confirmed that the journalist is Peter Burrows, one of the reporters that covered Arista’s IPO on Friday.
Burrows is not the only reporter that covers Arista for Bloomberg. But sources tell us that he was researching stories about Cisco, Arista’s arch rival, and this somehow made him a target for the offer.
Bloomberg, however, wasn’t the news organisation that went public with this stock-sharing scheme. Last month, a leading technology journalist, Fortune’s Adam Lashinsky, broke the news that he was offered pre-IPO stock in Arista Networks.
Lashinsky viewed the situation as an example of how Silicon Valley is living in its own ethical bubble and as well as the lengths some tech companies are willing to go to win favourable buzz.
The plan was apparently known to the highest levels of the company including CEO Jayshree Ullal, Lashinsky reported at the time.
We asked an Arista spokesperson why Arista was offering stock to journalists, if any accepted the offers and if Arista had since rescinded all of the offers. Arista had no comment.
Bloomberg offered us this statement about the situation, “Our reporting speaks for itself.”
And since we’re all in the mood for a disclosure, here’s ours: Arista has not offered pre-IPO stock to reporters at Business Insider.
NOW WATCH: Tech Insider videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.