Tuesday, August 7, 2018

Stub 2.1: Research

Tony Spada spent the next week in Sacramento.  During that week he had lunch with each of his three, independent information sources.  The meetings were on different days. The agents did not know about each other, and in fact, had unknowingly bumped into each other at various parties while working the last job.

He paid each one and then asked if they would be willing to relocate to Berkeley, California for another “research” assignment.

Tony told them that his client had a great deal of money to invest and was considering diversifying into the pharmaceutical industry.  Since this was a new industry for his client, Tony wanted to know “What Black Swan events kept top executives awake at night?  What scenarios give them nightmares?”

Tony said that his client’s greatest fear was that some unforeseeable chain of events might occur that would destroy the company’s value so quickly that his client would not be able to exit the stock position in an orderly way.  That is, his client might not be able to get out from beneath the falling piano.  

While a stockholder with a small position might be able to exit the burning theater intact, a stockholder with a large position would not.  And he repeated, his client had a GREAT deal of money to invest.

Tony paid very well and was not pushy regarding time.  That made their jobs much easier.  The surest way to shut off information was to be too eager of a listener.  All three had the same modus operandi, they were “old dogs” who allowed themselves to be mildly impressed by the accomplishments of tomorrow’s rising stars. 

The wannabe stars invariably orbited the true stars.  The best information was usually collected by listening to the quiet conversations being held at the next table over.  The true stars were very tolerant of the old dogs because the old dogs entertained the bores who would otherwise be attention-whoring the stars.

The investigators only half believed Tony.  They thought it more likely that Tony intended to beat down the stock price before his client took his position.  To that end they would include several scenarios that would temporarily lower the price of the company without striking the company a mortal blow.  This was not their first rodeo and Tony paid very, very well.

Next Installment of Stub

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