It's no secret that big institutional investors have a lot of advantages on Wall Street. They get the first chance to buy hot initial public offerings. They get to meet in person with companies' managements.
A vote of confidence from Cisco Systems can be very important to fledging technology companies, especially if they have initial public offerings on the horizon.
In a Ponzi scheme, a promoter pays back his initial investors with money he has raised from new investors. Eventually, the promoter can no longer find enough new investors to pay off the people who have already put up money, and the scheme collapses.
As the Nasdaq soared in 1999 and early 2000, demand for many offerings far exceeded the supply of shares available at the initial offering price.